The operational logic of USDD's "mini central bank"

If you are interested in macroeconomics or monetary policy, you can actually think of @USDD - Decentralized USD as a "mini on-chain central bank," which makes it a lot more fun.

The core of USDD 2.0 consists of three parts: over-collateralization, price stability module (PSM), and open market operations (OMO). Over-collateralization is responsible for the "underlying safety cushion," ensuring that even if the prices of some collateral assets fluctuate, the system overall still has sufficient assets to cover all USDD; the PSM provides a relatively stable exchange channel, allowing USDD to be exchanged with other stablecoins at low slippage within a specific price range, guiding arbitrageurs to participate in price correction; OMO is similar to "open market operations," where in extreme market conditions, the reserve party buys or sells USDD or collateral assets on CEX/DEX to intervene in market liquidity.

Technically, all of this is executed through smart contracts: collateralization, liquidation, minting, and redemption all have clear parameters and triggering conditions. For users, the most intuitive feeling is not these terms, but rather: you open the price chart and see USDD consistently fluctuating around 1 dollar slightly, instead of frequently experiencing sharp decouplings.

In a sense, USDD is using "on-chain rules + algorithms + market forces" to jointly accomplish one thing: pulling the price back to the peg as much as possible. Whether this design is perfect can be discussed, but at least it provides a researchable and iterable sample. Will you want to read its white paper in depth, or is it enough to see it stable at 1 dollar? #USDD以稳见信