Competition in stablecoin space is getting more interesting everyday. Among the newest players in the field are NEAR and TRON. NEAR has launched its USN Stablecoin on a testnet. And Justin Sun of Tron has announced a launch of USDD stable coins on Tron which is scheduled to be issued on May 5, 2022. Both projects seem to be aiming to be in competition with UST and will work in a similar way UST does. Sun's coin goes even further and intends to offer 30% APY. Now we thought HBD's 20% APR was too high? :)
Reading the announcement statement, I had difficulty continuing from the very first sentence of the first paragraph which start like this:
Blockchain believers pursue to decentralize everything centralized, on the strong faith in the capabilities of mathematics and algorithms rather than violence and power in creating a desirable future for the world.
Wait a second, that doesn't sound like Sun. Decentralize centralized? I thought he got it backwards. But the following sentence eliminated that theory.
Today, we see the possibility of decentralizing the blockchain world's most centralized territory.
Either he has evolved in understanding blockchain technologies and have embraced decentralization, or just being dishonest. By this time it has become evident that my judgement was clouded by my bias. It was time to get the positivity prism and read the announcement again through this prism. If it wasn't for Sun, Hive would have never existed. Positivity prism started working right away. Impressive. So, if Hive wouldn't exist without Justin Sun, does that mean Sun created Hive? That doesn't sound right either. Positivity prism didn't work. Back to reality.
Jokes aside, it is important to keep biases in check to get some kind of understanding reading such news and announcements be it by Sun or any other crypto influencer. Otherwise it is easy to miss the important point, which may just be valid and may also present useful ideas. Sun continues with hyperbole and says the following:
TRON DAO joined hands with major blockchain players to launch USDD (Decentralized USD), the most decentralized stablecoin in human history, making finance accessible to all by applying mathematics and algorithms.
That would be nice. I do like decentralized. If it is the most decentralized in human history, I am in. Evidence please.
I really had to laugh at this one:
Evolving from the Stablecoin 1.0 and 2.0 eras represented by Omni-based and TRON-based USDTs, blockchain is now ushering into the Stablecoin 3.0 era. This movement will be led by TRON's USDD.
I didn't know stablecoins were going through 1.0, 2.0, 3.0, etc stages. That is very informative. Thank you, Justin. However, from what I hear USDD is basically going to copy Luna's UST. Ctrl+C & Ctrl+V and we enter the new era of stablecoins.
He goes on explaining all these 1, 2, 3 stages and reasons for the creation of USDD from Tron's point of view. It does seem like they are serious about it. However, I think the real reason is they just saw the success of UST and decided why not on Tron. Sure, why not? Competition is a good thing. Speaking of the competition, their the interest payments for USDD will be at 30% APY.
Upon its establishment, the TRON DAO Reserve will set its basic risk-free interest rate to 30% per annum and facilitate other decentralized and centralized organizations that accept USDD to implement consistent interest rate policies.
I don't blame them to go that high. One would need a lot a trust in anything Sun related, so 20% may not work. But 30% could do the trick. You know, greed doesn't follow reason. Not always. Another positive things for USDD is that it will be available on Ethereum and BNB chains as well.
I am probably not going to do anything with USDD on any chain. My stablecoin of choice is HBD and for a lot of good reasons. Yes, while I may be biased here due to investment on Hive and HBD, but HBD has unique and useful features that none of the stablecoins can offer. At least not yet. That is a topic for another day.
Feel free to read Justin Sun's full announcement yourself - An Open Letter on the Issuance of USDD, a Decentralized Algorithmic Stablecoin on TRON | TRON DAO.
What I want to learn more about is NEAR and its USN stablecoin. That does seem like an interesting project. If you know how it works and can explain in simple terms, please do in the comments.