How It Works
USDD uses a hybrid stability mechanism. The TRON DAO Reserve holds a collateral buffer of BTC, USDC, USDT, and TRX with an over-collateralization ratio maintained above 130%. Users can mint USDD by depositing TRX or other accepted collateral, and the peg is defended by TRON DAO Reserve interventions in open markets. The protocol has eliminated the pure algorithmic elements that caused TerraUSD's collapse; however, TRX remains part of the collateral mix, creating reflexive risk. USDD also generates yield through a programmatic rate called the USDD Staking Rate, funded by Tron DAO Reserve income.
Backing Type: Hybrid
Hybrid stablecoins combine multiple backing mechanisms — typically a mix of fiat collateral, crypto collateral, and algorithmic supply adjustments — to balance capital efficiency with stability and decentralization.