Today, the Terra Classic (LUNC) community has another new development: a proposal for creating a Euro-pegged stablecoin EUTC is currently being voted on by validators. This is another step for the community on the road to reconstruction following the collapse of USTC, aiming to introduce a new stable asset anchored to the Euro into the LUNC ecosystem.
Seeing this message, my feelings are a bit complicated. On one hand, I applaud the resilience and efforts of the LUNC community; on the other hand, I can't help but recall the disaster involving USTC (formerly UST) that affected the entire crypto world. It cruelly proves one thing: the 'stability' of a stablecoin cannot rely solely on algorithms and community belief, but requires solid, transparent, and verifiable value support.
This immediately reminds me of @usddio (USDD) and the #USDDStabilityBreedsTrust# concept it has always advocated. The LUNC community is attempting to rebuild the stablecoin narrative from the ruins, while the existence of USDD provides us with an observable contrast sample of 'how stablecoins should build trust'.
From the lessons of USTC to the attempts of EUTC, USDD has demonstrated another path of 'stability'.
The cornerstone of trust: over-collateralization vs. algorithm dependence: The collapse of USTC (and its predecessor UST) was primarily due to its algorithmic stability mechanism forming a death spiral under extreme market pressure, lacking adequate hard asset support. The stability of USDD, on the other hand, is primarily based on on-chain transparency and real-time verifiable over-collateralized crypto assets (such as BTC, TRX, etc.). Its 'stability' does not rely on assumptions of future growth or complex arbitrage mechanisms, but rather on the reserves that are already locked and publicly disclosed. This represents a more conservative and solid trust model.
Governance and Responsibility: Decentralized DAO vs. Community Proposals: The launch of EUTC on LUNC requires community proposals and voting, reflecting decentralized governance. The key parameter adjustments of USDD (such as collateral rates) are also decided by the decentralized autonomous organization (DAO). However, the core difference between the two is that USDD's governance is optimized around a stable system that has been tested by the market and backed by real assets; whereas LUNC's governance still needs to build market trust for a new stablecoin from scratch. The former's task is to 'maintain trust', while the latter's challenge is to 'establish trust', which poses entirely different difficulties.
Diversity of value anchoring: Multi-asset support vs. single fiat currency peg: USDD is pegged to the US dollar, but its collateral is a diversified basket of crypto assets. The proposed EUTC plan aims to peg the euro. This raises a question: for users, holding a stablecoin (USDD) that is over-collateralized by diversified crypto assets and ultimately pegged to the US dollar, and holding a stablecoin (EUTC) that may still need to explore its support mechanism and is pegged to the euro, which one currently provides clearer 'value certainty' and broader utility? In the cross-border crypto economy, dollar-denominated stablecoins remain the most liquid and widely used medium.
The efforts of the LUNC community are commendable; they are struggling to explore a path to rebirth after trauma. However, for most users seeking asset stability and utility, choosing a project that has already established a complete, transparent, and stress-tested stable mechanism may be a lower-risk and more efficient choice.
@usddio (USDD)'s value lies not only in providing a stable trading medium but also in establishing a referable standard for the industry regarding 'stability' through its actual operational mechanisms: transparent reserves, decentralized governance, and the prudent principle of over-collateralization.
When considering participation in any emerging stablecoin narrative (including EUTC), it may be worthwhile to regard USDD as one of the benchmarks for assessing 'credibility' and 'robustness'. True 'stability breeds trust' does not come from grand blueprints, but from mechanisms that have withstood tests in everyday transactions. By this standard, USDD has already covered a distance worth observing.
