The USDD collapse event wasn't as sensational as the collapse of other algorithmic stablecoins (such as UST and LUNA), but its stability issues did draw some attention during the unstable period of the crypto market. Here is some background on the USDD collapse event and related crises:

1. The inherent risks of algorithmic stablecoins
As an algorithmic stablecoin, USDD, similar to Terra's UST, relies on algorithms rather than asset reserves for its stability. Although USDD uses TRX (the native token of TRON) as support, during severe market fluctuations, the algorithmic mechanism may not adjust the supply in time, leading to price volatility.