Creating a truly reliable stablecoin is not just about printing money. The approach of USDD in building a stablecoin system on the TRON network is like a precise tripod - if any leg is missing, it will fall over. Today, let's break it down and discuss what exactly allows it to maintain 'stability.'

First cornerstone: What is the hard truth of anchoring?

Stability is relative; just like when you say 'the weather is nice today,' you need to know what you're comparing it to - yesterday's heavy rain or last month's heatwave. USDD chooses to anchor to the US dollar, and there is deep logic behind this:

  • The US dollar is one of the strongest assets in global consensus; most people have a scale in their hearts, knowing how much 1 USD is roughly worth.

  • Meeting the maximum range of demand, cross-border payments, trade settlements, asset preservation... global users can understand and use it.

  • Establish a trust foundation; the clearer and more universal the anchor is, the lower the acceptance threshold for new users.

But the question arises—how do you know if USDD is actually worth 1 USD now?

The second cornerstone: the 'collective wisdom' of super representatives

The TRON network does not know the price of USDD outside; it's like you are locked in a room guessing if it's raining outside. The solution of USDD is clever: let the super representatives act as 'windows'.

The brilliance of this oracle mechanism lies in:

  • It is not determined by one person, but allows multiple super representatives to vote independently.

  • Taking the weighted median—this is much smarter than a simple average and can effectively resist the interference of extreme quotes.

  • Rewarding honest voters: the closer your voted price is to the final consensus, the more reward you get.

  • Punishment mechanism: although not explicitly stated, those who vote absurdly naturally do not receive rewards, which may affect reputation in the long run.

Statistics are taken every N blocks, like regularly 'calibrating a clock', ensuring the system always knows the real situation outside.

The third cornerstone: the 'market hand' of intelligent adjustment.

Knowing the price deviation is not enough; the key is to be able to 'pull it back'. The adjustment mechanism of USDD follows the most fundamental principles of economics:

When the price of USDD < 1 USD

This indicates that there is too much USDD in the market, and everyone thinks it is not worth 1 USD. At this time, the system will:

  • Contract supply—reduce the circulating USDD.

  • Principle of scarcity: when something is scarce, it naturally becomes more valuable.

  • Specific operation: it may be through smart contracts to recycle and destroy, or to increase the cost of minting.

when the price of USDD > 1 USD

This indicates that USDD is too sought after, and everyone is willing to spend more money to buy it. At this time, the system will:

  • Expand supply—increase the issuance of USDD.

  • Principle of sufficiency: when something is easy to buy, the price is hard to inflate.

  • Specific operation: lowering the entry threshold, increasing market supply.

Where is the real challenge?

This system seems perfect, but there are still challenges in actual operation:

  1. Will super representatives collude to cheat?

    • Theoretically possible, but the weighted median mechanism and reward design increase the cost of collusion.

    • If the quotes deviate significantly from market consensus, these representatives' credibility in the community will also be damaged.

  2. Is the adjustment mechanism fast enough?

    • The cryptocurrency market is changing rapidly; if prices fluctuate sharply, can the system's response keep up?

    • This depends on parameter settings (such as the size of N) and the strength of adjustments.

  3. What to do in extreme market conditions?

    • When facing a death spiral like LUNA/UST, relying solely on supply and demand adjustments may not be enough.

    • Does USDD have an additional 'emergency brake' mechanism?

Written at the end: Stability is an unending balancing act.

The design of USDD embodies the core wisdom of the blockchain world: solving centralized problems in a decentralized way. It does not rely on a single institution for pricing, but establishes a set of rules that incentivizes multiple parties to report the truth; it does not rely on administrative orders to regulate the market, but uses algorithms to automatically enforce economic laws.

But this is ultimately an experiment. All stablecoin protocols are walking a tightrope—too loose and it will spiral out of control, too tight and it will become rigid. Whether USDD can become the 'digital dollar' of the TRON ecosystem depends not only on mechanism design but also on its performance in real storms.

After all, in the ocean of cryptocurrencies, true stability is not being static but the ability to maintain a course in the midst of turbulence. The ship of USDD has already set sail; whether its tripod design is stable enough will be answered by time.

@USDD - Decentralized USD #USDD以稳见信