Tron Stablecoin USDD Withdraws $750m BTC Collateral, Raises Concerns

IconCryptoNewsTerminal Staff22 Aug, 2024

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Tron Stablecoin USDD Withdraws $750m BTC Collateral, Raises Concerns

Tron's USDD stablecoin has withdrawn $750 million in Bitcoin (BTC) collateral, according to data from The Block. This move was made to "improve capital efficiency," according to Tron founder Justin Sun. However, concerns have been raised regarding the actual collateral ratio of USDD, with some estimates suggesting it stands at just 53%. These concerns have been dismissed as rumors by USDD. USDD is an algorithmic stablecoin, meaning its value is maintained by a combination of code and market forces. TRX is currently known to be the primary collateral asset for USDD. The move has raised concerns about the stability of USDD, as it is now backed by less collateral. However, Sun has said that the long-term collateral ratio of USDD will exceed 300%. Only time will tell whether or not these concerns are justified. In the meantime, it is important to be aware of the risks associated with investing in algorithmic stablecoins.

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