Justin Sun’s Tron-Based Stablecoin USDD Raises Concerns After Withdrawing $732 Million Of Bitcoin From Reserve

• TRON DAO has mined 12,000 Bitcoins worth $732 million from the USDD stablecoin reserve.
• The move was made without a DAO vote, raising fears as investors pointed out its similarity to the pre-collapse UST.
• Justin Sun urged investors not to worry and assured them of the safety of USDD.

The crypto community showed concern about the USDD stablecoin on Thursday after Tron DAO withdrew $732 million worth of Bitcoin from its reserve. This raised fears as users reminisced about similar events before the implosion of the UST stablecoin.

Justin Sun Responds to USDD Fears

TRON’s DAO, which oversees the stablecoin reserve USDD, sparked fears among investors on Wednesday after withdrawing 12,000 bitcoins valued at $732 million from its reserve. The move fueled concern about USDD decentralization as it was carried out without a DAO vote.

The USDD stablecoin was launched in 2022 as one of the major alternatives to the UST Terra stablecoin before the crash. USDD is backed by multiple assets in TRON’s reserve, controlled by the network’s DAO. However, there has rarely been activity from the DAO regarding decisions regarding the stablecoin, leading users to doubt the integrity of the network’s decentralized system.

Users also drew similarities between USDD and Terra’s stablecoin UST before its collapse in 2022. However, Tron founder Justin Sun published an X post explaining that Bitcoin’s retreat was due to the rate of guaranteeing USDD that exceeds the threshold set by the “system”. He pointed out that USDD’s guarantee rate exceeding 300% is not “efficient use of capital”.

According to Sun, this move was also a process to ensure that the asset is free from any future threats, stating that the network plans to upgrade the stablecoin in the coming years.

On the other hand, TRON’s latest meme coin generator, SunPump, has continued its impressive run since launch. The platform surpassed Pump.fun in daily revenue on Thursday, taking in $560,000 compared to the latter’s $368,000.

Specifically, SunPump released 7,352 new meme tokens in the last 24 hours, surpassing Pump.fun’s 5,694 during the same period, according to Dune Analytics data.

Tron’s native token TRX is up nearly 2% in the last 24 hours.