2025-01-16 10:17:01 by coinpaprika

By Jakub Lazurek 16 Jan 2025 (2 days ago) 2 min readJustin Sun announces Tron's USDD 2.0 stablecoin with 20% APY, raising community doubts after the failures and transparency issues of USDD 1.0.Justin Sun has announced the upcoming launch of USDD 2.0, a revamped version of Tron's stablecoin, promising users an attractive 20% APY. This yield will reportedly be fully subsidized by Tron, with Sun emphasizing that the company has sufficient funds to support the initiative. However, the community remains skeptical, given the challenges faced by USDD 1.0. USDD 1.0, introduced in 2022, initially offered a 30% APY but later reduced it due to market instability. The stablecoin faced repeated setbacks, including losing its dollar peg several times. Transparency issues also plagued the project, such as when the Tron DAO Reserve withdrew 12,000 Bitcoin from USDD’s collateral without prior approval, shifting its backing primarily to Tron’s native token, TRX. These missteps ultimately led to USDD 1.0 being delisted from major exchanges. Despite these past failures, Tron is pushing forward with USDD 2.0. Sun reassured users that all interest payments would be sent to a transparent address. "There’s no other reason—it’s simply because we have plenty of money," he stated, brushing off concerns about the source of the yield. However, the offer of a 20% APY has raised eyebrows, as it remains unclear how Tron plans to sustain such payouts while achieving profitability. Tron’s native token, TRX, recently reached an all-time high, but its volatility poses challenges as a stablecoin backing asset. TRX has seen a decline in value in recent weeks, adding to investor concerns about the feasibility of USDD 2.0. While Sun’s substantial capital resources—evident from his $30 million investment in Trump’s World Liberty Financial—may temporarily fund the project, long-term sustainability remains a significant question. The community’s doubts are not unfounded. Past issues with USDD 1.0 and the ambitious promises surrounding USDD 2.0 make potential investors cautious. While Tron claims it has sufficient funds to subsidize the stablecoin, the strategy of relying on cash reserves is unlikely to be viable indefinitely. At some point, the company will need to demonstrate how it plans to turn this seemingly generous offer into a sustainable and profitable venture. Go back to All News