AUS
NZ
UK
CA
USA
IND
Tron founder Justin Sun has addressed concerns following the removal of 12,000 Bitcoin from the collateral backing USDD, a stablecoin governed by the Tron DAO Reserve. On August 19, it was reported that Bitcoin worth over $729 million was withdrawn from an address previously listed as holding part of USDD's collateral, according to data from blockchain explorer Blockchair.
There has been speculation on social media regarding the withdrawal, with some attributing the move to Sun himself, while others have expressed concerns about the absence of a community vote on the matter. According to the Tron DAO Reserve's governance page, the only previous vote was on whether to use burned Tron (TRX) tokens, which occurred in May 2023.
In response to the concerns, Sun clarified on August 22 that the removal of Bitcoin aligns with the standard procedures in decentralized finance (DeFi). He compared USDD's mechanism to MakerDAO’s Dai (DAI), explaining that it allows collateral holders to withdraw assets if the collateralization exceeds a certain threshold set by the system. Sun noted that USDD's collateralization rate is currently above 300%, indicating that the capital utilization is relatively inefficient.
The Bitcoin address previously listed as part of USDD’s reserves has been removed from the stablecoin’s transparency page. The page now indicates that USDD is primarily backed by Tether (USDT) and TRX. With over 744 million USDD tokens in circulation, the reserves, comprising approximately $1.7 billion in TRX and USDT, provide a collateralization ratio exceeding 230%. This ratio signifies that USDD is well-supported by its assets compared to other stablecoins like DAI, which is 120% collateralized, and market leaders such as USDT and USD Coin (USDC), which are fully collateralized.
Launched in 2022, USDD was introduced as a competitor to the now-defunct TerraUSD (UST). Like USDC and USDT, USDD aims to maintain its value in parity with the United States dollar.
