USDD

Bitcoin

TRON

Tron founder Justin Sun has played down concerns after the removal of 12,000 Bitcoin used as backing for USDD, a stablecoin governed by the Tron DAO Reserve.&nbsp;
On Aug. 19, 12,000 Bitcoin (<a data-ct-non-breakable="null" href="https://cointelegraph.com/bitcoin-price" rel="null" target="null" text="null">BTC</a>) worth over $729 million was <a data-ct-non-breakable="null" href="https://docs.usdd.io/usdd-issuance/over-collateralization-and-transparency" rel="noopener noreferrer nofollow" target="_blank" text="null">removed</a> from an address previously listed as holding some of the collateral for USDD (<a data-ct-non-breakable="null" href="https://cointelegraph.com/usdd-price-index" rel="" target="_self" text="null">USDD</a>), according to blockchain explorer Blockchair.
Some on X allege Sun himself was responsible for the move, while others have raised concerns that the BTC was removed without a vote from the <a data-ct-non-breakable="null" href="https://cointelegraph.com/learn/what-is-a-dao" rel="null" target="null" text="null">Tron DAO Reserve</a>.
<a data-ct-non-breakable="null" href="https://usdd.io/#/vote" rel="noopener noreferrer nofollow" target="_blank" text="null">According</a> to the governance page, the latest and only question that has been put to a community vote was whether to use burned Tron (<a data-ct-non-breakable="null" href="https://cointelegraph.com/tron-price-index" rel="null" target="null" text="null">TRX</a>) tokens on May 2023.
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 <img alt="Justin Sun says removing 12K Bitcoin from USDD is just ‘DeFi 101’" name="" src="https://s3.cointelegraph.com/uploads/2024-08/Tweet%20Symb">
 <figcaption style="text-align: center;">
 Source: <a data-ct-non-breakable="null" href="https://x.com/NoCryptFish/status/1826085314219147667" rel="noopener noreferrer nofollow" target="_blank" text="null">Symbio&nbsp;</a>
 </figcaption>
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In an Aug. 22 <a data-ct-non-breakable="null" href="https://x.com/justinsuntron/status/1826537914173718893" rel="noopener noreferrer nofollow" target="_blank" text="null">statement</a> on X, Sun played down concerns, arguing that USDD’s mechanism is similar to MakerDAO’s Dai (<a data-ct-non-breakable="null" href="https://cointelegraph.com/dai-price-index" rel="" target="_self" text="null">DAI</a>) and allows a collateral hodler to withdraw without approval if collateral exceeds an amount specified by the system.&nbsp;
“This is part of the basics of DeFi 101. Currently, USDD has a long-term collateralization rate exceeding 300%, which means that the capital utilization is not very efficient.”
<figure>
 <img alt="Justin Sun says removing 12K Bitcoin from USDD is just ‘DeFi 101’" name="" src="https://s3.cointelegraph.com/uploads/2024-08/Final">
 <figcaption style="text-align: center;">
 Source: <a data-ct-non-breakable="null" href="https://x.com/justinsuntron/status/1826537914173718893" rel="noopener noreferrer nofollow" target="_blank" text="null">Justin Sun</a>
 </figcaption>
</figure>
“Regarding the decentralized stablecoin USDD, its mechanism is similar to MakerDAO’s DAI and is not mysterious,” he claimed.&nbsp;
Cointelegraph has reached out to MakerDAO for comment.
<h2 id="usdd-no-longer-backed-by-bitcoin">USDD no longer backed by Bitcoin</h2><paragraph>
 The Bitcoin address that held the collateral has been removed from the USDD’s transparency page, which now shows the stablecoin is backed primarily by Tether (
 <a data-ct-non-breakable="null" href="https://cointelegraph.com/tether-price-index" rel="" target="_self" text="null">USDT</a>) and TRX.
</paragraph>
<figure>
 <img alt="Justin Sun says removing 12K Bitcoin from USDD is just ‘DeFi 101’" name="" src="https://s3.cointelegraph.com/uploads/2024-08/DOA%20T">
 <figcaption style="text-align: center;">
 USDD’s transparency page no longer lists Bitcoin as collateral after it was recently transferred out. Source: Tron DAO Reserve
 </figcaption>
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USDD’s transparency page shows over 744 million USDD tokens are circulating. The stablecoin’s transparency page lists $1.7 billion worth of TRX and USDT in its reserves, giving it a collateralized ratio of over 230%.&nbsp;
This means USDD has more assets than stablecoins in circulation. In comparison, DAI is 120% collateralized, and market leaders USDT and USD Coin (<a data-ct-non-breakable="null" href="https://cointelegraph.com/usdc-price-index" rel="" target="_self" text="null">USDC</a>) are 100% collateralized.
Related: <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/sunpump-flips-pumpfun-daily-revenuetoken-creation" rel="" target="_self" text="null">Sun rises: Tron’s new memecoin deployer flips Pump.fun</a>
USDD launched in 2022 as a competitor to Terra’s now-defunct TerraUSD (UST) token. Like USDC and USDT, its value is supposed to be pegged to the United States dollar.&nbsp;
However, it has <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/tron-s-stablecoin-usdd-loses-dollar-peg-on-suspected-selloff-by-alameda-research" rel="" target="_self" text="null">experienced some volatility</a>, falling to an all-time low of $0.92 on March 11, 2023, according to CoinMarketCap.&nbsp;
Magazine: <a data-ct-non-breakable="null" href="https://cointelegraph.com/magazine/algorithm-choice-can-fix-social-media-but-only-on-decentralized-platforms/#:~:text=Unfortunately%2C%20the%20algorithms%20quickly%20learned,theories%2C%20outrage%20and%20public%20shaming." rel="" target="_self" text="null">Dorsey’s ‘marketplace of algorithms’ could fix social media… so why hasn’t it?</a>

Justin Sun says removing 12K Bitcoin from USDD is just ‘DeFi 101’

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