Don't use USDD.
The hot new "algorithmic" stablecoin on the block, USDD is absolutely a Ponzi scheme. Not too long ago I wrote about the over-collateralization of the USDD token and how I don't think it's going to matter how much collateral there is. In that article, I even showed how they were lying about their "transparent" DAO reserves...
Remember kids, this is the blockchain. The blockchain don't lie. The people using it might though cough Justin Sun cough. Earllier today, CoffeeZilla tweeted about his recent investigation into USDD and man... It's an absolute banger, and the video made it hit even harder. Credits to him for the investigation.
Of course, this is all just speculation and none of it has been "proven"... But I'd be willing to bet that this shit is legitimately how USDD is operating. The first major issue is that USDD isn't even an algorithmic stablecoin yet because the burn mechanism between USDD and TRX hasn't been activated.
This means that only a select group of whitelisted addresses can burn TRX to mint USDD. Of course, Justin Sun's wallet is one of them.
The other major issue I have with the way the "reserve" is used to back USDD is the blatant lying about the assets backing it. For some reason they expect people to consider TRX that's in a burn contract a backing asset. First off, that's not how that works. Burning a token means that token ceases to exist. How can it be part of the backing?
Considering this... The amount of actual crypto assets backing is $1,595,522,865, not the $2,318,485,889 that is shown on the front page of the TronDAO website. If I'm not mistaken that's about $722,963,024 in assets they are claiming back their shit coin. In reality, the 320% collateralization is actually closer to 220%. That's not a bad figure for backing the 722 million tokens in circulation.
So why lie about it? So you can grab the attention of people by throwing insane numbers in their face? 40% APR and 320% collateralization?! How? That's my question. Just how?
Generally speaking, if you're having trouble understanding where the yield comes from... you are the yield.
Looking at Justin Sun's public Ethereum wallet you can pretty easily trace the movement of USDD across Ethereum, BTT Chain, and Tron. 2 of those chains are created by Justin Fucking Sun! I mean, why try to move these funds around on different chains? His Tron wallet is holding an insane amount of money too, over $2 billion.
With this information, you can deduce that our boi Justin is minting these tokens himself. Literally 94% of the supply has been minted by Justin Sun, so when does the decentralization happen? He can choose to mint these bad boys any time he wants.
Honestly, it feels like the 40% APR for staking USDD is bait so he can dump his fat bags on you before this thing collapses. We saw UST collapse with over $2 billion deployed to try to save the peg, and it didn't work. Just wait til the algorithmic burning mechanism goes live for USDD. It's going to death spiral so fast.
The sad part is that he will have already made billions of dollars and can just blame it on the market conditions. Plus he has diplomatic immunity in Switzerland, and he's the king of fleeing countries. What a great guy.
Someone please explain to me how this isn't a Ponzi scheme. The buyers are the yield that's being paid to other buyers.
Please don't buy his shit coin like he suggests in the video above. Stay away from USDD.
Just stick with HBD and put it in Hive savings for 20% APR. Or if you want exposure to the market... PolyCUB has the pHBD-USDC pool at 21% APR.