Justin Sun has announced the launch of USDD 2.0, a new version of Tron’s stablecoin, offering a 20% annual percentage yield (APY). Tron will fully subsidize this yield, and Sun claims the company has enough funds to support it. However, the community is skeptical due to the issues faced by USDD 1.0.
USDD 1.0 was launched in 2022 with a 30% APY, which was later reduced due to market instability. The stablecoin struggled to maintain its dollar peg and faced transparency problems.
Notably, the Tron DAO Reserve withdrew 12,000 Bitcoin from USDD’s collateral without approval, leading to a shift in backing to Tron’s native token, TRX. These problems resulted in USDD 1.0 being delisted from major exchanges.
Despite these setbacks, Tron is moving ahead with USDD 2.0. Sun assured users that interest payments would be sent to a transparent address, stating, “We have plenty of money.” However, the promise of a 20% APY raises concerns about how Tron will sustain such payouts while remaining profitable.
Tron’s native token, TRX, recently hit an all-time high but has shown volatility, complicating its role as a stablecoin backing asset. TRX’s recent decline adds to investor worries about USDD 2.0’s viability. Although Sun’s financial resources, including a $30 million investment in Trump’s World Liberty Financial, may support the project temporarily, long-term sustainability is uncertain.
Community doubts stem from past issues with USDD 1.0 and the ambitious claims of USDD 2.0.
