Tron is making huge movements since the launch of its algorithmic stablecoin USDD. Although it's an unpopular topic right now due to the crash of LUNA and UST, Tron is climbing the ladder with this launch.
Launched on the 5th of May, USDD is now available to trade on some big exchanges like Kucoin, Huobi and Poloniex. It's also available on JustLend, a decentralized application built on the Tron blockchain to lend and borrow assets. USDD can be lent for an APY of over 10%. JustLend has surged in TVL and has 2.67 billion dollars locked in the protocol.
The biggest news for the Tron blockchain is that it's now the number 3 chain with the most total value locked. Tron appears in the third place with 5.32 billion dollars locked in its blockchain, over Avalanche that has 4.49 billion and Solana that has 4.15 billion, according to Defillama. Before the launch of USDD, Tron only had ranked in the number 7, this success can be attributed to USDD.
Another situation that helped Tron climbing is the system of minting new USDD that can only be achieved by burning TRX. TrlRX circulating supply has been going down by huge numbers. On the 22nd of May more than 1 billion TRX was burned to mint USDD, on the 23rd of May 500 million TRX was burned to mint USDD. These are huge numbers, Tron had over 100 billion TRX tokens in circulation and right now it has 95 billion. TRX is burned by using smart-contracts, transfering Tron assets and minting Tron assets. The Blockchain was already burning TRX before USDD, but the numbers were at maximum 5 million per day, with USDD these numbers entered the room of the hundred of millions and even in the billions. It's expected that as Tron increases in price this burning mechanism will slow down, because it will take less TRX to mint USDD.
Tronscan is a great way to check the numbers on a daily basis and can be checked by following the following link:
Tronscan (Supply and Burn)
USDD was marketed with a 30% APY on JustLend, this APY was the starting APY and it has been decreasing over time, this is due to more USDD being staked on the platform. Right now users can get 11.32% APY for lendimg their USDD and pay 8.26% for borrowing USDD. It is also to note that this lending APY isn't paid to users in USDD only, it's paid in USDD and Just (JST), JustLend governance token. Although the APY is high the total value of the APY isn't paid just in USDD.
One thing that everybody is concerned is some similarities with the UST protocol that came crashing down in the beggining of May. This crash combined with the lack of trust people have on Justin Sun creates a scenario of some fear on investing in this stablecoin and in the Tron ecosystem. This fear has to be always considered to avoid loses like LUNA investors had. USDD never lost its peg to the dollar since its inception, even through the LUNA disaster it held its value well and always traded between 0.987$ and 1.03$, these are normal swings for an algorithmic stablecoin. It trades right now at exactly 1.00$. The current supply of USDD is not very high and sits at 543.9 million USDD minted, making its market capitalization low compared with the token of the Tron blockchain, TRX, that sits with a market capitalization of over 7.5 billion dollars.
The question in everybody minds is if this stablecoin will be successfull or if it will have the same faith of UST. The answer to this question can only be answered with time. As this time goes by there are people that are willing to risk a bit more than others and this will dictate the success or failure of the Tron stablecoin.
Don't forget the important rule of only investing what you are willing to lose and to do a proper research before investing.
Best Regards,
Cryptopeach