The stablecoin sector faces a moment of panic again, as Ethena's synthetic stablecoin USDe has seen its market value nearly halved in just over two months following the “1011 crash” event in October, dropping from nearly $14.7 billion on the 9th to around $6.4 billion, with a net outflow of as much as $8.3 billion. This data once again exposes the fragile facade of the stablecoin industry, revealing that stablecoins may not necessarily be 'stable.' This has led the market to turn its attention to the well-established decentralized stablecoin USDD. In the context of ongoing industry risks, can USDD avoid the pitfalls faced by USDe? What will its outcome be?

The halving of USDe's market capitalization is not coincidental but the inevitable outbreak of its mechanism flaws during market fluctuations. As a synthetic stablecoin, USDe relies on a hedging mechanism of 'crypto assets + derivatives' to maintain its peg, and essentially has not escaped excessive dependence on market confidence and algorithmic adjustments. During the October '1011 crash', Bitcoin's single-day drop of 13% triggered panic across the market, causing USDe's algorithmic hedging mechanism to fail instantly, with prices once falling to 0.62 dollars, a decoupling amplitude of 38%. Although prices have since recovered somewhat, the trust gap has already emerged, and capital flight became inevitable. This scenario is reminiscent of the 'death spiral' of Terra UST in 2022, reaffirming that stablecoins that excessively rely on algorithms and lack solid asset backing ultimately struggle to withstand extreme market shocks.

In contrast, USDD has survived multiple industry storms, primarily because it timely abandoned high-risk models, completing a critical upgrade from a 'algorithm + collateral' mixed model to a purely over-collateralized model. After the 2.0 version upgrade in January 2025, USDD's collateralization rate has maintained over 200% year-round, providing solid support through diversified asset combinations such as TRX, sTRX, and USDT, fundamentally addressing the inherent flaws of algorithmic stablecoins. Meanwhile, the introduced PSM anchoring stabilization module allows for 1:1 zero-slippage exchange, quickly correcting prices through arbitrage mechanisms during market fluctuations. During the significant decoupling of USDe in the '1011 crash', USDD remained stable around 1 dollar, which is a strong testament to this robust mechanism.

However, this does not mean that USDD can rest easy. Currently, USDD still faces three core challenges, and its outcome largely depends on whether it can effectively respond. Firstly, the risk of ecological dependence has not been resolved. The circulation and liquidity of USDD are highly bound to the Tron network. If TRX prices fluctuate sharply or technical problems arise within the network, it may still indirectly affect its stability. Although this differs from the risk logic of USDe's dependence on the overall market's crypto asset trends, it similarly has single-point dependency risks. Secondly, the sustainability of subsidies is in doubt. The current annualized yield of 6-12% offered by USDD partly relies on subsidies from the Tron DAO, which is similar to USDe's early reliance on market sentiment to maintain its popularity. In the long run, this model is difficult to sustain, and once subsidies are reduced, it may trigger capital outflows. Thirdly, regulatory uncertainty remains the biggest variable. As USDe's plummet has triggered regulatory attention, global regulations on stablecoins are tightening. While USDD's decentralized attributes can provide some buffer, it still needs to adapt to policy changes.

From market feedback, USDD's 'robust gene' has gained some recognition. As of December 2025, its circulation is approximately 816 million dollars, with a locked value exceeding 860 million dollars. During the same period when the market capitalization of stablecoins like USDe significantly shrank, it still maintained price stability. This indicates that as long as it adheres to the core logic of 'over-collateralization and transparency', USDD is expected to further consolidate its advantages amidst industry reshuffling. In the future, if it can continuously reduce dependence on a single ecosystem, expand cross-chain liquidity, and find sustainable revenue models, USDD is likely to avoid the fate of USDe and become a representative of stablecoin industry stability.

The market capitalization of USDe has been halved, ringing alarm bells for the entire industry: the core value of stablecoins lies in 'stability', and this stability must be built on solid asset backing and rigorous mechanism design. The outcome of USDD will ultimately be determined by its own risk control capabilities. Users need to rationally view the risk boundaries of various stablecoins and diversify their holdings to avoid point risk; for USDD, only through continuous iteration and optimization, and respect for market risk, can it go further in a turbulent industry environment.
@USDD - Decentralized USD #USDD以稳见信