After spending a long time in the crypto world, DeFi has become second nature. When it comes to stablecoins, I encounter them even more frequently—especially during volatile market swings, having them around actually makes me feel more at ease. Recently, I took a deep dive into the upgrade plan for USDD 2.0 and gained quite a lot. This isn’t just a simple mechanism adjustment; it feels like a new approach to the core issue of stablecoin design.

I remember the early stages of USDD, when it followed an algorithmic stablecoin route, issued by TRON DAO Reserve. Theoretically, algorithmic stablecoins are quite elegant—automatically adjusting supply through code logic to maintain the peg. The idea is great, but reality is often harsh. Whenever market sentiment fluctuates, the risk of de-pegging is always lurking. During the 2022 crash wave, the entire industry experienced turbulence, and algorithmic stablecoins were branded as "high risk." Although USDD’s early design had some innovations, it relied too heavily on external resources and subsidies to sustain itself, which isn’t very solid in the long run. Back then, I thought, if only it could incorporate an over-collateralization mechanism, it would be much more reliable.

The turning point came in January 2025. The new version of USDD completely changed its approach, fully embracing an over-collateralization model, with all collateral and trading data openly on-chain, maximizing transparency. For those who have experienced their funds being trapped in black-box projects, this is especially important. USDD 2.0 also underwent five rigorous audits by CertiK and Chainsecurity, making its security certification very solid. Even major exchanges have taken notice—