PRESS RELEASE. Geneva, Switzerland / July 22 / – Reserve TRON DAO (TDR) officially responded to some Frequently asked Questions from the community about U.S. dollardecentralized and overcollateralized stablecoin THRONE.
The USDD stablecoin is currently the most backed stablecoin in the entire cryptocurrency market. The main mission of USDD is to provide the blockchain world with a decentralized cryptocurrency with a stable value. USDD represents true decentralization in the stablecoin market. Other stablecoins such as USDC or USDT pegged to central platform reserves in United States dollars (USD). By their nature, USDC fundamentals and USDT are considered centralized stablecoins with strict oversight by regulators around the world.
Current market conditions have raised concerns that assets could be liquidated and frozen without the consent of the holders. The USDD overcomes these fears from a variety of perspectives. Institutions whitelisted by the TRON DAO Reserve (TDR) are eligible to mint USDD. The value of the USDD is backed by an over-collateralization of highly liquid cryptoassets, consisting of but not limited to: BTC, USDTUSDC and TRX. This allows USDD to be free from centralized intermediaries, so users do not have to worry about their assets being frozen with or without notice. This allows USDD holders to truly have full ownership of their stablecoin.
Stability is an important aspect of a successful stablecoin. Centralized stablecoins like USDC and USDT regulators are required to maintain a 1:1 reserve ratio against the US dollar. If the centralized authorities of these stablecoins fail to meet their reserve requirements, this could result in the centralized stablecoins losing their pegging to the US dollar 1:1. USDD is immune to such issues due to its decentralized nature. USDD is not intended to be strictly pegged to the US dollar; instead, it floats up and down around him. USDD price stability is supported by the monetary policy adopted by TDR based on market conditions.
In volatile market conditions, the US dollar is not considered depegged if it is within 3% above or below its pegging to the US dollar. This provides additional flexibility for TDR to make the necessary monetary policy adjustments, if necessary. Due to the recent volatility in the markets, the US dollar correctly corrected with the TDR monetary policy tools, which have weathered the recent worries strongly. This technique is known as Linked system of exchange rates and successfully allowed USDD to scale properly.
The recent stablecoin controversy arose from the collapse of LUNA and UST. The USDD has fluctuated below its dollar peg in part due to market misconceptions surrounding the LUNA/UST fiasco. LUNA and UST do not follow the TDR policy that USDD is subject to; instead, LUNA and UST function strictly on the basis of an algorithmic arbitrage system of burning and minting. This means that UST did not have to rely on any reserve system to support the 1:1 pegging to the US dollar. This entire process was heavily dependent on LUNA’s liquidity, when market conditions worsened causing UST to lose its peg, this resulted in a major shock that lowered the prices of LUNA and in turn UST as there was no reserve system backing it up. This is what ultimately caused the collapse of prices for LUNA and UST. On the other hand, USDD is fully backed by a reserve system filled with liquid assets managed by TDRs as mentioned earlier. Detailed information about TDR assets is published in real time on tdr.org.
TDR uses four monetary policy tools to ensure the stability of the USDD, contributing to the further growth of the TRON ecosystem. The four policy instruments set benchmark interest rates, open market operations (OMO), window management, and a coin burn mechanism. TRX and US dollar. The TDR will also look at additional monetary policy tools to ensure continued stability and growth of the USDD ecosystem. The ultimate goal of TDR monetary policy adjustments is to keep USDD price stable while making it the most trusted and decentralized stablecoin on the market.
For more information on USDD, check out our recent Blog Postwhich takes a detailed look at various community issues and concerns.
USDD is a decentralized and over-collateralized stablecoin launched jointly by Reserve TRON DAO and major top level blockchain institutions. The USDD protocol runs on TRON networkconnected to Ethereum and BNB chain through BTTS internet protocol, and it will be available for more blockchains in the future. USDD is pegged to the US dollar through TRX and maintains price stability under the leadership of the TRON DAO reserve. This provides access to a stable and decentralized digital dollar system, which in turn ensures financial freedom for everyone.
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Credit : news.bitcoin.com