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USDD is issued and managed by the Tron DAO Reserve (TDR). Only whitelisted members of TDR can mint and burn USDD.
USDD is claimed to be an over-collateralized, decentralized stablecoin but it is substantially similar to the failed UST stablecoin (Luna <> UST). Only ~50% of USDD’s supply is backed by non-TRX collateral, nearly all of which is BTC. Stable assets in reserve comprise less than 2% of USDD's supply.
The wallet containing USDD’s BTC has been claimed by Huobi exchange as their own. As both USDD and Huobi are controlled by Justin Sun, we suspect commingling of assets.
We strongly recommend users NOT to use USDD.
The Stability factor is evaluated on the following:
1. Reserves Management - Quality, quantity, storage and segregation of reserve assets
2. Market Feedback - Indicators of market's confidence in a stablecoin derived from price and trade data
3. Mechanism - Stabilization methods that protect the stablecoin
The Management factor is evaluated on the following:
1. Restrictions - What deterrents exist to prevent key personnel of stablecoin projects from unethical and illegal behavior?
2. Negative Track Record (if applicable) - Have key personnel been involved in scams, frauds or other illegal activities?
This factor aims to assess risks arising from technical implementations – i.e, smart contract code and oracles. It is currently not assessed, but we plan for it to be evaluated in the future.
The Decentralization factor is evaluated on the following:
1. Platform Censorship Risk
2. Custodian Risk
3. Type of Collateral
4. Diversified Voting Power
5. User Censorship Risk
The Governance factor for on-chain stablecoins is evaluated on the following:
1. Voting Systems - Does the governance function have an appropriate process for voting encompassing proposal, quorum requirements and outcome implementation?
2. Anti-Governance Attack Measures - Are there appropriate preventive and reactive measures to counter governance attacks?
However, USDD does not have a public governance mechanism.
This factor seeks to incorporate external feedback mechanisms such as market and social sentiment into our internal ratings. It is currently not assessed, but we plan for it to be evaluated in the future.