Tron (TRX) Founder Justin Sun Unveils Plan To Secure USDD Stablecoin From Terra-Like Collapse

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Tron (TRX) founder Justin Sun doesn’t want the Decentralized USD (USDD) stablecoin to become the next TerraUSD (UST).

Last month, algorithmic stablecoin UST lost its peg to the US dollar and collapsed along with its affiliated stablecoin Terra (LUNA), wiping out $40 billion in crypto market capitalization.

Prior to the UST meltdown, the Tron decentralized autonomous organization (DAO) worked in conjunction with other blockchains to launch USDD.

Sun tells Bloomberg that they want USDD to stay “overcollateralized” to avoid a UST-like fiasco.

“This has been in the plan, but Terra/Luna definitely accelerated and prioritized this for our team. We want to have USDD to be overcollateralized, which I think will make market participants more comfortable about using us in the future.”

Sun says the Luna Foundation Guard, a non-profit organization built to support the Terra ecosystem, was passive and had a “very easy to predict” strategy.

Tron DAO will do things differently, according to the founder.

“Tron DAO will be very active in the market and less predictable. You make the market feel comfortable, but without telling too much information.”

USDD currently has a collateralization ratio of 222%, according to the TRON DAO website. The decentralized stablecoin has a supply currently worth about $667.5 million.

Tron DAO has reserves worth $815.5 million at time of writing. That includes 14,040.6 Bitcoin worth about $423.3 million, about 1.9 billion Tron worth around $152 million and $240 million worth of stablecoin Tether (USDT).

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