#USDD 2. The Operation Mechanism of USDD

The stability of USDD relies on two core aspects:

1. Over-Collateralization Mechanism

USDD is over-collateralized with various mainstream assets (such as TRX, BTC, USDT, etc.) to ensure its value stability.

TDR reserves more than 100% of assets to maintain the peg.

2. Algorithmic Adjustment System

When USDD deviates from the price of 1 USD, the system incentivizes users to arbitrage, thus pushing the price back to the peg.

For example:

When the price of USDD is above 1 USD: users are encouraged to mint USDD and sell it.

When the price of USDD is below 1 USD: users are encouraged to redeem USDD for collateral assets.

This mechanism allows market forces to help maintain stability.

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3. Advantages of USDD

1. Highly Decentralized

USDD does not rely on a single institution but is maintained by a DAO reserve organization composed of multiple parties, reducing centralization risks.

2. Over-Collateralization Enhances Security

Compared to the collapse risk of algorithmic stablecoin UST, USDD strengthens robustness through over-collateralization.

3. Multi-Chain Support, Rich Ecosystem

USDD can be used on multiple chains such as TRON, Ethereum, BNB Chain, etc., with good cross-chain compatibility.

4. Wide Range of Use Cases

DeFi Lending

Cross-Border Payments

Store of Value Tool

DEX Trading Pairs

#USDD