Recently, Binance launched USDD wealth management with an annualized return of up to 25%. Many people's first reaction is: Sun Yuchen is here to harvest the leeks again.

After all, the old version of USDD collapsed before, and algorithmic stablecoins detaching from their peg is not new. But upon closer inspection, this time's USDD 2.0 is completely different from the old version.

Previously, it relied on burning TRX to maintain its price, which is essentially robbing Peter to pay Paul. Now it has changed to over-collateralization: for every 1 USD USDD issued, there is more than 1 USD of assets backing it, and all collateral is publicly verifiable on-chain, which is more transparent than many stablecoins.

The key point is that it has added an automatic price stabilization mechanism (PSM): when the USDD price deviates from 1 USD, it can be exchanged 1:1 without slippage for USDT, allowing arbitrageurs to automatically pull the price back to its original position. This mechanism has been running for more than six months, and the USDD price has basically stabilized around 0.999, and it hasn't failed during recent market fluctuations.

Additionally, it no longer solely relies on subsidies to generate profits. The protocol itself has already earned 7.2 million USD through strategies, making the source of income more substantial. This is also why large platforms like Binance are willing to launch it—at least the risk control has passed.

However, it must be said that high returns are definitely accompanied by high risks. Even with the mechanism upgraded, there are still potential risks such as smart contract vulnerabilities and extreme market conditions. Plus, the project still carries the 'Sun Yuchen' label, and his past operations always make people more vigilant.

So the suggestion can be summed up in one sentence: you can allocate appropriately, but never put everything in. Treat it as part of your stablecoin holdings, not all of it. In this market, even the things that seem stable cannot be trusted 100%.

Finally, a reminder: opportunities and traps in the market often look alike. When everyone is complaining, there may still be opportunities; but before diving in, think carefully about whether you can bear that risk. @USDD - Decentralized USD #USDD以稳见信