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USDD

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What is USDD Staking?

USDD is the first over-collateralized decentralized stablecoin with a guaranteed minimum collateral ratio of 130%. It has been launched collaboratively by the TRON DAO Reserve and top-tier mainstream blockchain institutions. The USDD protocol runs on the TRON network, is connected to Ethereum and BNB Chain through the BTTC cross-chain protocol, and will be accessible across more blockchains in the future.

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Where can I earn yield on USDD?


Where can I get USDD?

You can now visit DeFi platforms on TRON, BNBChain, and Ethereum to swap for USDD.

You can also get USDD on centralised exchanges like:

  • Kucoin
  • Poloniex
  • Huobi
  • Gate.io

What is the core vision of USDD?

USDD’s core mission is to provide the blockchain economy with a decentralised cryptocurrency of stable value, that is pegged to $1.


What is USDD?

USD Digital (USDD) officially made its debut on May 5, 2022, as a decentralised stablecoin on Tron, BNB Chain, and Ethereum blockchains. It is pegged to the U.S. dollar in a 1:1 ratio, meaning that USDD maintains its value at a fixed exchange rate to the U.S. dollar, whereby 1 USDD is always supposed to be equivalent to $1.


Who is the team behind USDD?

Tron developed USDD, the network was founded by Justin Sun in 2017 and the network has since grown into an active ecosystem of builders.


Is USDD backed by FIAT Dollars?

No, USDD is not bound by the duty of redemption in real U.S. dollars as is the case with centralised stablecoin issuers, and its price stability is maintained through a series of monetary policies adopted by the TDR based on market conditions


Can USDD de-peg from $1?

Yes, the price of USDD is not strictly pegged to the U.S. dollar but floats up and down around it. The TDR considers it acceptable when the price of USDD fluctuates within a 3% range (up or down) under extremely volatile market conditions.

If USDD records a significant and unreasonable movement in its price, the TDR will strive to keep its value stable by taking concrete monetary policy interventions as it has done in the past.


What is USDD backed by?

The stability of USDD is backed by the reserve assets of the TDR, not the price of TRX.

  • USDD’s price stability is maintained by a basket of monetary policies adopted by the TDR and backed by its reserve assets. As long as the TDR holds a sufficient and healthy reserve, the price of USDD is stable.
  • The details of the TDR’s reserve assets are published in real-time on TRON DAO Reserve. As of now, there are 990 million USDC, 140 million USDT, 14,000 BTC, and 11 billion TRX in the reserve, with a total market value of close to $2.3 billion, 3 times the value of the 725 million USDD in circulation. Even under the extreme circumstance when the value of TRX reaches zero, the remaining reserve assets worth $1.4 billion are still double the value of USDD in circulation. Therefore, the TDR reserve can provide sufficient and healthy liquidity for the stability of USDD.
  • The mutual-minting relationship between TRX and USDD is just part of the effort made to help maintain USDD’s linked exchange rate system, which can be explained by referring to Hong Kong’s case: the Hong Kong Monetary Authority allows swaps between the RMB and the HK dollars, but the RMB is not pegged to the HK dollar. In fact, the stability of the HK dollar is backed by a basket of currencies including the RMB.

What monetary policies will the TDR adopt to maintain the value of USDD?

The goal of monetary policies is to maintain USDD’s price stability and drive the growth of the TRON ecosystem. Their monetary policy tools are:

  • Setting an interest rate

The TDR works with its partner institutions and protocols to set USDD’s benchmark interest rates and has the power to adjust the rate at any time based on market conditions.

  • Open market operations

The TDR adopts a mechanism that functions similarly to traditional open market operations. Through buying or selling USDD and reserve assets, including TRX, BTC, USDT, and USDC on CEXs or DEXs, it manages to keep USDD’s price stable. The TDR will announce each of its OMO publicly to the market on its Twitter account (@trondaoreserve) to positively guide the market perception.

  • Window guidance

In times of severe market turbulence, the TDR will partner with institutions such as JustLend and CEXs to limit the amount of USDD and TRX lent or even temporarily pause the lending of USDD and TRX to crack down on malicious short-sellers.

  • Minting-burning mechanism of TRX and USDD

The minting-burning mechanism between TRX and USDD also helps USDD’s stability. Depending on the situation, the TDR will achieve this by employing methods such as enabling or disabling the minting process, adjusting the mint-burn ratio, and imposing upper limits on daily minting and burning activities, all carried out in a decentralized manner.

 


How does the mint/burn mechanism work?

When the price of USDD is greater than $1:

To bring the price back to $1, the USDD protocol temporarily allows users to swap $1 worth of TRX for 1 USDD. This swap burns $1 worth of TRX and mints 1 USDD. As more and more users execute these swaps, the resulting increase in USDD supply and arbitrageurs selling in the external market will gradually stabilize the price at $1 per token.

For example, if the USDD price goes up to $1.1, then the new USDD you have minted by swapping $1 worth of TRX will also be valued at $1.1 in an external market. You could then sell that USDD to make a net profit of ($1.1 – $1.0 =) $0.1

When the price of USDD is less than than $1:

If the USDD price drops below $1 (say, to $0.9), you can buy 1 USDD for only $0.9 in an external market. You could then swap 1 USDD for $1 worth of TRX in the protocol. Each swap results in 1 USDD to burn in the system, which then gradually reduces its circulating supply. You could now sell your $1 worth of TRX in an external market to make a profit of ($1- $0.9 =) $0.1 per swap.

 

USDD
USDDUSDD
USDD is the first over-collateralized decentralized stablecoin with a guaranteed minimum collateral ratio of 130%. It has been launched collaboratively by the TRON DAO Reserve and top-tier mainstream blockchain institutions. The USDD protocol runs on the TRON network, is connected to Ethereum and BNB Chain through the BTTC cross-chain protocol, and...Read more

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