As Ethereum repeatedly strangles near the 3000 points, retail investors panic and sell during each fluctuation, while the founder of Tron, Justin Sun, boldly claims in a tweet 'All you need is USDD', causing the positive sentiment for the stablecoin to surge by 15% within 15 minutes.

When you are looking for a stable 'safe haven' in a turbulent market, a stablecoin called 'never depegged' USDD is quietly infiltrating the Ethereum ecosystem.

The price of Ethereum fluctuates sharply between 3080 and 3300 points, and the panic in the market is like a cloud that cannot be dispelled. Whenever the market fluctuates violently, stablecoins are always seen as a safe haven for investors.

On September 8, 2025, the decentralized stablecoin USDD officially completed its native deployment on Ethereum, claiming to bring new choices to the market.

01 From Edge to Center: New Players in the Stablecoin Market

The stablecoin market is no longer dominated solely by USDT and USDC. In this market with a total market capitalization of up to $2.5 trillion, new competitors are constantly emerging, trying to carve out a piece of the pie.

USDD was born against this backdrop. It was launched by TRON DAO in 2022 and initially operated on the TRON blockchain. Unlike centralized stablecoins that rely on a single issuer's credit, USDD prides itself on being a decentralized stablecoin.

The design of this stablecoin aims to maintain a 1:1 peg with the US dollar, achieving this goal through innovative mechanisms and transparent design.

In early 2025, USDD completed a significant 2.0 version upgrade. This upgrade brought significant changes: the standard for reaching a circulation of 100 million, which originally took two weeks, was rapidly achieved shortly after the upgrade.

This upgrade fundamentally changed the structure of USDD, shifting from the original model to a truly over-collateralized mode, and enhanced the protocol's stability and sustainability through a series of innovative mechanisms.

02 Three Major Innovative Pillars: PSM, Intelligent Allocators, and Security Mechanisms

USDD 2.0 claims to build a self-sufficient, sustainably growing on-chain financial system through three core mechanisms.

The price stability module is the key design for USDD to maintain its 1:1 peg to the US dollar. This mechanism enables seamless exchanges between USDD and mainstream stablecoins like USDT and USDC, with almost zero fees.

USDD supports exchange with USDT in the TRON ecosystem, and after deploying on Ethereum, PSM has also added the feature of lossless exchange with USDC.

This mechanism acts like a thermostat, automatically adjusting market supply and demand through arbitrage opportunities to bring the USDD price back to the peg when it deviates from 1 USD. As of early September 2025, data shows that the total amount of USDD exchanged through PSM has significantly increased from $1.15 billion in the second quarter to $2.5 billion.

The intelligent allocator is a key innovation that USDD attempts to escape reliance on external subsidies and achieve self-sustainability. It can automatically allocate idle reserve funds to mature DeFi protocols like Aave and JustLend, creating additional yields for USDD holders.

The security liquidation and auction mechanism aims to prevent system collapse. When the collateral rate falls below the safety line, this system triggers on-chain liquidation procedures to recover collateral assets through auctions, ensuring the stability of the entire system.

03 Multiple Risks: Cracks Beneath the Glamorous Surface

Although USDD demonstrates innovation in its mechanism design, multiple risks still deserve vigilance. Market analysis reveals these risks quite thoroughly.

Centralization and associated risks are paramount. Despite being named 'Decentralized Dollar', USDD has an inseparable connection with the TRON ecosystem and its founder Justin Sun. Some analyses suggest that the 'TRON DAO Reserve' may simply be a glamorous packaging of the control mechanism by the TRON founder.

There is a clear correlation between Justin Sun's Twitter dynamics and USDD price fluctuations. In February 2025, after he posted a tweet about USDD, the token's trading volume surged by 33% within an hour.

Concentration risk of collateral cannot be ignored. USDD's collateral is mainly supported by TRX, with the current collateral rate reaching 204.5%. This highly concentrated collateral structure exposes USDD to the risk of TRX price fluctuations.

Liquidity challenges are also severe. Although USDD's market capitalization reaches hundreds of millions, its daily trading volume is unusually sluggish. Data shows that at one point, when USDD's market capitalization reached $462 million, the daily trading volume was only $17,569.

Historical decoupling records are also potential hidden dangers. USDD has deviated from its pegged price multiple times in its historical trading, reaching a high of 1.05 USD and a low of 0.92 USD.

These fluctuations far exceed people's expectations for stablecoin stability, especially in February 2025, when Justin Sun's high-profile promotion of USDD 2.0's live broadcast led to a temporary decoupling of this stablecoin.

04 Multi-Chain Expansion: Ethereum is Just the First Step

On September 8, 2025, USDD completed its native deployment on Ethereum, and its smart contracts have been audited by the well-known security company CertiK. This marks an important step in USDD's multi-chain strategy.

As the world's largest DeFi ecosystem, Ethereum brings broader application scenarios and user bases for USDD.

To celebrate this deployment, USDD launched an Ethereum-exclusive incentive program, where users holding native Ethereum USDD can enjoy tiered APY, up to 12%. In addition, the sUSDD that USDD plans to launch will be an interest-bearing product, helping holders earn interest through a transparent decentralized savings system.

According to USDD's roadmap, it will continue to deploy on other mainstream public chains like BNB Chain. This multi-chain expansion strategy aims to break ecological barriers and connect a broader blockchain network.

05 Future Outlook: Finding Positioning Amid Regulation and Competition

The stablecoin market is facing new changes. With the implementation of the EU MiCA regulations and the US GENIUS Act, a clearer regulatory framework for the stablecoin market is being formed.

In this context, USDD and other stablecoin projects need to adapt to new compliance requirements.

The trend of market diversification is evident, with fiat-backed stablecoins like EURC and PYUSD rapidly growing. At the same time, Paxos has proposed USDH with profit-sharing features, and MetaMask is preparing to launch mUSD, indicating that the market is seeking innovation.

USDD needs to find a foothold in the fierce market competition, which may require continuous efforts in the following areas: enhancing liquidity depth, diversifying collateral asset structures, and expanding real economic application scenarios.

A user who has held USDD for months noticed that the market capitalization of this stablecoin has reached $462 million, but the daily trading volume is only $17,569. Its price trajectory on the price chart shows an almost perfect straight line.

USDD's trading data shows that its tokens are held by only about 1016 addresses, with less than 2000 transactions. In the same crypto community, investors are discussing whether the Ethereum price can break through the resistance level of 3380 points.

@USDD - Decentralized USD #USDD以稳见信