Justin Sun says withdrawing 12K Bitcoin from USDD is just ‘DeFi 101’.
Tron founder Justin Sun downplayed the threat after 12,000 bitcoins were removed from the Tron DAO Reserve, a stablecoin used to back the decentralized dollar.
Blockchain Explorer Blockchair Reveals 12,000 Bitcoin (BTC) Worth Over $729 Million In 2018 On August 19, it was removed from an address that previously contained a decentralized US dollar (USD) limited guarantee.
On X, some say Sun himself is responsible for the move. While others raised concerns that Bitcoin was removed from the TRON DAO reserve without a vote.
According to the management page, the last and only question put to the public vote is whether to use Tron (TRX) tokens that will burn in May 2023.
Source: Symbio
In an Aug. 22 statement on X, Sun played down concerns, saying the USD mechanism is similar to MakerDAO's DAI and allows holdings to be withdrawn without permission if holdings exceed the amount specified by the system.
“This is part of DeFi Basics 101. Currently, USDD's long-term margin is over 300%, which means that the use of capital is not very efficient.”
Source: Justin Sun
As for the decentralized stablecoin USDD, its functionality is similar to MakerDAO DAI and it is not secret, he said.
Cointelegraph has reached out to MakerDAO for comment on the claims.
USDD is no longer supported by Bitcoin.
The Bitcoin address holding the hold has been removed from the USDD transparency page, revealing that the stablecoin is now primarily backed by Tether (USDT) and TRX.
USDD's transparency page no longer lists Bitcoin as a currency after its recent transfer. Source: TRON DAO Reserve
The USDD transparency page shows that more than $744 million are currently in circulation. Stablecoin's transparency page lists $1.7 billion worth of TRX and USDT in its reserves, giving it a collateral ratio of over 230%.
This means that USDD has more assets than stablecoins in circulation. In comparison, Dai (DAI) is 120% guaranteed, and USDT and CircleUSD (USDC) are only 100% guaranteed.
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USDD in 2010 In 2022, Terra's now-defunct TerraUSD (UST) token was launched as a competitor. Like USDC and USDT, the value must be pegged to the US dollar.
However, according to CoinMarketCap, it experienced some volatility, hitting an all-time low of $0.92 on March 11, 2023.
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