The founder of the TRON (TRX) blockchain, Justin Sun, announced on Twitter today that traders can now earn interesting returns by depositing the brand new USDD stablecoin on the lending JustLend protocol. Remarkably, USDD was actually designed with Terra’s UST as an example and we all know by now how it turned out with UST.
Made last month Justin Sun announced that the TRON network would come with its own stablecoin. At the time, Sun neatly explained what the system behind this stablecoin would look like:
“When the price of USDD is less than 1 USD, users and arbitrageurs can send 1 USDD to the system and receive 1 USD in TRX. When the price of USDD exceeds 1 USD, users and arbitrageurs can send 1 USD of TRX to the decentralized system and receive 1 USDD.”
💪 Today, we see the possibility of decentralizing the blockchain world’s most centralized territory. pic.twitter.com/S5gX3JpiVH
— HE Justin Sun 🅣🌞🇬🇩 (@justinsuntron) April 21, 2022
This is essentially the exact same system that the Terra network used for their UST stablecoin. We all know by now that this system was not exactly watertight. In fact, both the LUNA cryptocurrency and the UST stablecoin have not yet been declared permanently dead.
Users are excited with annual returns of up to 40% for depositing the USDD stablecoin on JustLend. The JUST Foundation even reported on Twitter that returns of up to 70% per year will be possible. These are of course huge returns and after the meltdown of LUNA and UST this seems almost too good to be true.
— HE Justin Sun 🅣🌞🇬🇩 (@justinsuntron) May 12, 2022
While it is of course too early to say that Tron’s USDD is doomed to fail, it is at least remarkable that this new stablecoin is so similar to a stablecoin that went down just a few days ago. The criticism from the crypto community against Justin Sun is therefore very large at the moment.