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The Pivot to Over-Collateralization
Just weeks after USDD launched, the crypto market witnessed the historic collapse of Terra's UST—a massive algorithmic stablecoin that lost its peg and wiped out billions of dollars. Recognizing the inherent risks of pure algorithmic models, the TRON DAO Reserve quickly pivoted. In June 2022, USDD was upgraded to an over-collateralized decentralized stablecoin. This meant that instead of relying purely on algorithms, every USDD minted was suddenly backed by a basket of high-value crypto assets (like Bitcoin, TRX, and USDT) worth significantly more than the

The History and Evolution of USDD
USDD was introduced in May 2022 by Justin Sun and the TRON DAO. Initially, it was launched as an algorithmic stablecoin. At the time, algorithmic stablecoins (which rely on complex mint-and-burn mechanics rather than hard assets to maintain their dollar peg) were highly popular in the decentralized finance (DeFi) space.