Justin Sun: No fear of decoupling, the Federal Reserve can give USDD the most solid guarantee

We just witnessed the collapse of the cryptocurrency version of Lehman Brothers.

In just 5 days from May 7th to 12th,. The algorithmic stablecoin UST on the Terra public chain was completely decoupled, and the price of the public chain token LUNA fell by nearly 100% until it returned to zero, and the market value of more than 40 billion U.S. dollars was wiped out.

In this darkest hour, the crypto community is starting to question the vision of an algorithmic stablecoin.

On May 5th, the well-known public chain TRON officially launched the decentralized stablecoin USDD. The latest circulation has exceeded 270 million, and the corresponding burned TRX exceeded 3.3 billion.

So can the decentralized stablecoin USDD successfully cope with the decoupling event? Jinse Finance recently interviewed Mr. Justin Sun, the founder of TRON.

Jinse Finance: On April 21, you issued an open letter stating that you will launch TRON’s decentralized stablecoin USDD on May 5. At present, it can be seen that USDD has been launched and circulated. Please first introduce the development of centralized stablecoins such as USDT on Tron?

Justin Sun: TRON has actually been the absolute leader in the industry’s stable currency field, and this position will be further strengthened after USDD is launched. Currently, USDD has been launched and circulated on TRON, Ethereum, and BNBChain, and has landed on mainstream platforms such as SUNSwap, Uniswap, Curve, PancakeSwap, and Ellipsis Finance. The latest circulation exceeded 270 million pieces, corresponding to over 3.3 billion TRX destroyed.

The TRON version of USDT is the mainstream stable currency preferred by more blockchain users. With the advantages of transparency and security, near-zero transfer fees, and second-level credit transfers, the TRON version of USDT is very popular in exchanges, enterprise users, and individual users. It also provides investors with an extremely convenient blockchain Entrance.

According to the data, with the continuous issuance of Tether on the TRON network, the circulation of the TRON version of USDT exceeded 40 billion for the first time in March this year, and has now reached 42.7 billion. In terms of the number of accounts held, the TRON version of USDT has completed a historical leap from 1 million to 10 million in the past year, and the monthly user growth has reached one million. More importantly, since its launch in 2019, the total amount of TRON USDT liquidation has exceeded 4 trillion US dollars, which has promoted the rise of encrypted payments mainly in stablecoin transfers around the world.

It can be said that the demand for the TRON version of USDT has soared over the past few years. This is not only due to the phenomenal development of the blockchain industry in the past few years, but also the huge user base and strong industry influence of TRON as a high-performance public chain in the industry. It is believed that with the upgrade of TRON DeFi and the continuous strengthening of the ecological construction on the chain, the application scenarios of the TRON version of USDT will be further expanded in the future, providing high-quality, inclusive and efficient financial services for more users around the world.

Jinse Finance:Given that the TRC20-USDT circulation has already dominated stablecoins, what is the basis for issuing USDD?

Justin Sun: As you said, after the circulation of TRC20-USDT surpassed the Ethereum version of USDT for the first time in April 2021, its dominance in the stablecoin field has gradually stabilized in the past two years. But the blockchain world always pursues the decentralization of all centralized things, including stablecoins. In the long run, decentralization must be its final attribution, and it is also the most in line with user needs and industry interests. To put it more bluntly, a large number of centralized products are circulating in the current blockchain world, which is contrary to the spirit of the industry. The status quo of the stablecoin ecosystem heavily relying on the centralized system needs to be changed.

From the perspective of the development process of the industry, decentralized stablecoins have already met the conditions for spreading. This can be seen from the expansion of the volume of decentralized stablecoins and changes in user awareness. Therefore, TRON, as a public chain with the most powerful transfer and clearing system in the industry, and a leading public chain in the field of stablecoins regardless of user scale or development experience, should stand up and carry the decentralized stablecoin when the conditions are ripe. banner.

As I said in the open letter, after realizing the success of the TRON USDT2.0 era, the TRON DAO revolutionized itself and made every effort to build the TRON USDD, hoping to push the development of global human stablecoins to a new level . Because no matter how successful the centralized stablecoin is, it will still be redeemed, managed and stored by a centralized institution, which will not only be more easily affected by the supervision of various countries, but also the fiat currency stored offline cannot be queried and constrained through the on-chain contract. The USDD and TRC20-USDT are also built on the high-performance public chain TRON, which naturally has a high-speed, low-fee, high-scale stablecoin gene, but it is completely decentralized, relying on mathematics and algorithms, and is similar to stablecoin development. In a lossless internal upgrade.

In short, only purer decentralization can truly bring the global influence of the blockchain to a new level. This is a topic that has a particularly profound impact on the industry. The issuance of USDD by Tron is like a saying that Chinese people often say, the merits of the present age will benefit the future.

Jinse Finance:What is the operating mechanism of USDD? How to ensure the stability of USDD? Will decoupling happen?

Justin Sun: USDD is a decentralized algorithmic stablecoin initiated by TRON’s joint reserves and blockchain mainstream institutions. It runs on the TRON network and is connected to Ethereum and Binance Chain through the BTTC cross-chain protocol. As a stable currency, USDD first needs to meet the needs of users for a stable digital currency. Therefore, USDD uses the US dollar (USD), which is the most widely used in the world, as an anchor to ensure that users can use a stable, decentralized, and tamper-proof USDD system.

At the same time, the USDD protocol obtains the real price of USD through the oracle machine. The oracle service is provided by TRON network super representatives, who vote in each voting period, counting votes every N blocks, and taking the weighted median of the votes of each super representative as the real price. The USDD protocol will use the weighted median price of the voting results as a benchmark, reward super representatives whose voting results are within the deviation value, and punish super representatives whose voting prices are outside the deviation value range. As a high-performance public chain in the industry, the TRON network has never had a security incident for many years. Obviously, it can provide USDD with the most convenient and reliable oracle service, which is a prerequisite for USDD price stability.

In addition, USDD is pegged to the US dollar with the help of TRX and keeps its price stable. To put it simply, it is to absorb the price volatility of USDD through the super representative of TRON, making TRX the most direct defense against USDD price fluctuations. In the short term, if the USDD price is lower than the target price, the super representative will burn USDD to mint TRX, prompting USDD to return to the target price. When the price of USDD is lower than 1USD, arbitrageurs and users can use 1 USDD to exchange TRX worth 1USD in the USDD agreement; when the price of USDD is higher than 1USD, arbitrageurs and users can use TRX worth 1USD to exchange 1USDD in the USDD agreement .

As for the issue of decoupling, in addition to USDD’s perfect arbitrage mechanism, TRON DAO Reserve can provide the most solid guarantee. Logically speaking, there is the Federal Reserve Bank first, followed by USDD. Extreme market conditions have always been the "natural enemy" of decentralized algorithmic stablecoins, and the so-called decoupling often accompanies them. As an important innovation in the industry, the main purpose of the establishment of the Federal Reserve Bank is to protect the blockchain industry and market, alleviate extreme and long-term downturns, and solve the panic problems brought about by the financial crisis. At the beginning of its establishment, the Federal Reserve Bank will preserve and host the $10 billion in highly liquid assets raised by the promoters of the blockchain industry as an early reserve.

At present, Alameda Research, Amber Group, Poloniex Exchange, Ankr, and Mirana have all become members and whitelist institutions of the Federal Reserve Bank of Poland. With the continuous expansion of the Federal Reserve's lineup, USDD's process of defending human financial freedom will also accelerate.

Jinse Finance:Many public chains have started to issue algorithmic stablecoins. For example, Near recently issued USDN, and Tron also issued USDD. Is this a trend? What makes USDD unique compared to them?

Justin Sun: In fact, algorithmic stablecoins are not very new, and have been developing with controversy in the past two years. However, judging from the current development momentum of decentralized stablecoins, changes in user concepts, industry fundamentals, and the inherent development needs of the blockchain towards more decentralization, algorithmic stablecoins are indeed becoming a trend. The growth rate of the market value of stablecoins has been much higher than that of the entire encryption market in the past year, and the status of algorithmic stablecoins in this track has grown by leaps and bounds.

In addition, starting from the major public chains, they all really hope to use algorithmic stablecoins to promote the development of their own ecology. Stablecoins are one of the most important traffic portals in the industry, and have significant impact on on-chain transaction volume, user activity, and the DeFi ecosystem. However, looking back at the development history of stablecoins, we can find that, in fact, whether its own public chain is strong enough is often the most powerful support for stablecoins. This is why, at present, the best stablecoin development is Tron, Ethereum and other leading public chains. The competition for decentralized stablecoins will, to a large extent, be the same.

For USDD, its uniqueness is that it is backed by the TRON public chain. TRON became fully decentralized last December and is now a decentralized autonomous organization (DAO) governed by the community. More importantly, TRON's user scale and accumulation in the stablecoin field are second to none in the industry. Up to now, the total number of TRON public chain users has exceeded 92 million, the number of transactions has exceeded 3.1 billion, and the cumulative settlement has reached 4 trillion U.S. dollars. It also has a complete DeFi layout based on SUN and JST as the ecological foundation. These will give USDD the most direct support.

In addition, USDD has the strong endorsement of the Federal Reserve Bank of Wave, which is also unique. As the industry's first decentralized central bank, in addition to alleviating extreme market conditions, the TRON Federal Reserve also has the ability to regulate the risk-free interest rate of stablecoins in TRON and other blockchain networks, protect the stability of the exchange rate of decentralized stablecoins, and keep financial reserve assets and other functions.

As far as USDD itself is concerned, it will also continue the high-speed, low-fee, and high-scale model standards of TRON USDT in the stablecoin 2.0 era. USDD has the characteristics of completely zero-threshold holding; low volatility, realizing the purpose of wealth preservation and appreciation; realizing the inviolability of private property in a complete sense. At the same time, the BTTC cross-chain protocol will make USDD naturally have the differentiated advantages of multi-chain deployment. All of these will help USDD to emerge in the field of decentralized algorithm stable currency and open the era of stable currency 3.0.

Jinse Finance:The key to the success of an algorithmic stablecoin is to have an ecosystem or many projects to adopt it. Currently, which projects use USDD? Which chains will USDD be listed on?

Justin Sun: That’s true. In order to achieve rapid growth in the initial stage of the algorithmic stablecoin, not only does it need a strong ecological support behind it, but it also needs to efficiently promote the expansion and cooperation with the project party. From this perspective, USDD has made a lot of practical progress after its release, which has rapidly expanded the application scenarios of USDD. Currently, SunSwap, SUN, PancakeSwap, Ellipsis Finance, Uniswap, Curve, and KyberSwap have become USDD DeFi trading platforms.

Specifically, after USDD was officially issued on May 5, it has passed the BTTC cross-chain agreement for the first time and entered Ethereum and BNBChain for circulation. Currently, the circulation on both Ethereum and BNBChain exceeds 40 million.

SUN.io on TRON has launched a new 3pool liquidity mining pool, including USDD, with a current APY as high as 57%; SunSwap has opened multiple USDD liquidity trading pairs, including USDD-TRX, USDD-USDT, USDC -USDD , TUSD-USDD, etc., high-yield mining is in full swing; JustLend has also officially launched USDD deposit mining. After the launch, the APY of deposit mining is as high as 70%. Depositing the same amount of USDD will allow more assets to be lent, which will greatly increase the utilization rate of USDD.

In addition, Ellipsis Finance (EPS) on BNBChain has opened the USDD/3EPS mining pool, and the current APR income is considerable; Curve on Ethereum has also officially launched the USDD/3 CRV LP mining pool, and the current APR is as high as 30.87%-77.175%. And the new BitTorrent Chain mining pool on KyberSwap also joined USDD. The mining pool currently has more than ten liquidity trading pairs to choose from, and the liquidity mining will last for 4 months, with a total reward of 1.5 million US dollars.

According to the plan, USDD is divided into two types of mining platforms, one is designated mining platforms, namely SunSwap, SUN.io, and JustLend, and the centralized platform is Poloniex. The designated platform cooperates with Poloniex, which can guarantee a maximum of 30% rigid interest rate. The second type of platform is a cooperative mining platform. The interest rate return of the cooperative mining platform is jointly supported by TRON DAO Reserve. The interest rate will fluctuate around 30%. DAO FedEx will do its best to ensure the interest rate return of the cooperative mining platform.

Here I would like to reveal to you in advance that in the future, USDD will also launch more global top exchanges and wallets one after another, so stay tuned!

Jinse Finance:According to the open letter, USDD will have four versions: Space, Tiangong, Moon, and Mars. Can you explain why it is designed this way? What goals does each release accomplish?

Justin Sun: The development of TRON USDD will be divided into four versions: Space, Tiangong, Moon, and Mars, which actually symbolize the four goals of human beings and TRON participating in space exploration in the future. Because both space and blockchain are important journeys for the future of mankind, they are also an inevitable trend in the development of human history. The courage, adventurous spirit and pioneering spirit contained in them are essentially interlinked. As a new force in the blockchain industry, the decentralized stable currency should have such attributes and the ambition of continuous development.

In the 1.0 space stage, USDD will be issued and fully circulated, and the TRON DAO central bank and its shareholder whitelist institutions will become the first batch of USDD minters. In the 2.0 Tiangong stage, the USDD decentralized network testnet will be launched, and the super representatives of the TRON testnet will run oracle nodes to test the stability of the price feeding system, etc. In the 3.0 lunar phase, the USDD decentralized network will be officially released to realize the complete decentralization of USDD minting, exchanging, and burning. The minting rights and burning rights will all be handed over to the TRON network. In the Mars 4.0 stage, the USDD decentralized network mainnet will be officially launched, and the TRON DAO central bank will transfer all USDD issuance and destruction rights to the TRON USDD mainnet.

After going through the above stages, the TRON ecosystem will eventually complete support for the USDD protocol from community ecology, wallets, browsers, exchanges, mining and other links. I believe that TRON USDD-based stablecoin 3.0 era will inject more energy into the development of the blockchain, and TRON DAO will also provide many investors with a more decentralized future.

Jinse Finance:What plans does TRON DAO have in the future to promote the further adoption of USDD?

Justin Sun: TRON DAO will spare no effort to promote the widespread use of USDD. As I said in my open letter, now we have the possibility of decentralization of the most centralized part of the blockchain world (stable currency). TRON There is no hesitation in leading the industry towards the stablecoin 3.0 era and accelerating the realization of human financial freedom.

At present, the circulation of USDD has exceeded 270 million pieces, and the corresponding TRX burning volume exceeds 3.3 billion pieces, which is an astonishing growth rate! Based on this, the TRON joint reserve has authorized 1 billion USDD, and the specific issuance and circulation will be determined by market demand. At the same time, the Federal Reserve will continue to expand members and whitelist institutions, continue to expand reserves, lay a solid foundation, and ensure the stability and decentralization of the USDD exchange rate. Here, more high-quality institutions are also welcome to join the Wave Fed.

Under extreme market conditions, the Federal Reserve Bank of Wave has made several moves to increase its reserves in recent days. First, it bought 504,600,250 TRX at an average price of US$0.07727 for US$38,993,043 on May 7, and then bought TRX, BTC and USDT several times. The most recent one was spent on May 13 for $36,730,197, buying 1249.57 BTC at an average price of $29,394. This not only ensures the security of the entire blockchain industry and the encryption market, but also keeps TRX and USDD stable in this market fluctuation. I believe that the combination of USDD and Tron joint reserve will be a powerful weapon to defend personal financial sovereignty.

In addition, TRON Network will take advantage of its billion-level user scale and active on-chain transfers to guide USDD, and TRON’s increasingly stable DeFi ecosystem will also fully incorporate USDD. Through the BTTC cross-chain protocol, USDD will enter more mainstream public chain circulation in the future, bringing convenience to users on different blockchains and improving the efficiency of capital utilization. Recently, the second season of the 2022 TRON Hackathon is about to start. The promotion of the event will strengthen the cross-chain ecology of BTTC, enhance the activity and innovation of the TRON network, and realize the assets on TRON including USDD in more areas. Blockchain thrives.

It is believed that under the background that the Federal Reserve Bank strictly enforces USDD’s 30% basic risk-free interest rate, and USDD’s designated and cooperative mining platforms are launched one after another, USDD will quickly accumulate the first batch of fans, and its circulation and user adoption will also steadily increase.