Chiara Bianchi
USDD, the algorithmic stablecoin created by Tron founder Justin Sun, has gone live on Ethereum, marking a major step in its mission to become a multi-chain and widely adopted stablecoin.
In a Medium post, the team described this expansion as “a new era for USDD”, bringing scalability and stability to Ethereum’s massive smart contract ecosystem.
To encourage adoption, the USDD team announced an exclusive airdrop for early Ethereum users starting Tuesday. Alongside this, it will introduce sUSDD — a savings version of the stablecoin, designed to let holders earn yield through a decentralized and transparent savings system.
Justin Sun also highlighted the potential of the Ethereum launch, writing on X that USDD could offer returns of up to 12% APY. He added:
“From now on, everyone has a decentralized choice for stablecoins! USDD is growing!”
How USDD Maintains Stability
USDD relies on a mix of over-collateralization, smart contracts, and market-based mechanisms to preserve its peg to the U.S. dollar. Initially launched by the TRON DAO Reserve in May 2022, the stablecoin is often compared to Terra’s UST, which collapsed the same year.
On Ethereum, USDD will feature a Peg Stability Module (PSM), enabling users to mint and swap USDD against USDT and USDC with minimal slippage, ensuring strong liquidity and price stability from day one.
Security and Reserve Backing
According to the announcement, the Ethereum deployment followed a full audit by blockchain security firm CertiK.
In 2024, the TRON DAO Reserve withdrew nearly $750 million worth of bitcoin from USDD’s reserves, leaving the stablecoin primarily backed by TRX, Tron’s native token. The DAO originally pledged to raise $10 billion in reserves from leading industry players to defend USDD’s peg during downturns.
Concerns About Decentralization
Despite the expansion, questions remain about USDD’s structure. Bluechip, a stablecoin rating agency, consistently gives USDD an “F” rating, citing concerns over decentralization. The agency estimates true collateralization at only ~53%, including TRX and other stablecoins such as USDT, USDC, and TUSD.
Currently, about $460 million worth of USDD is in circulation, down from $750 million a year ago, according to CoinGecko.
Why Ethereum Matters for USDD’s Future
Ethereum remains the largest hub for stablecoins and DeFi activity, with the deepest liquidity and broadest developer ecosystem.
By deploying natively on Ethereum, USDD expands its reach to a much larger audience, increasing its potential for adoption while maintaining a commitment to decentralization, transparency, and sustainable yield.
