If you want to learn about whether the USDD stablecoin is scam or not, this detailed guide is a good place to start.
USD Digital (USDD) officially launched on May 5, 2022, as a stablecoin on Tron, BNB Chain, and Ethereum blockchains. It is pegged to the U.S. dollar in a 1:1 ratio, meaning that USDD maintains its value at a fixed exchange rate to the U.S. dollar, whereby 1 USDD is always supposed to be equivalent to $1.
Tron, a blockchain-based decentralized digital platform, developed USDD to replicate the success of Terra UST. Founded by Justin Sun in 2017, Tron and its homegrown cryptocurrency, Tronix (TRX), are already familiar names in the crypto market.
USDD face with scam accusation on Youtube
The next obvious question now would be whether it is the right investment choice for you. According to a YouTube investigation, Justin Sun’s USDD may be a ponzi scam in his video that was published on June 24.
There has been debate regarding the investors’ possible exposure to risk because the USDD’s performance has frequently lagged behind the $1 peg. The USDD had a substantial drop with the collapse of the dollar peg on June 13, it hit a low of $0.93 before rising to its former level of $0.98.
Justin Sun doesn't have good reputation in the market
The billionaire Justin Sun, who is not well-known for his reputation. Youtuber pointed out that Justin has fled many countries to avoid punishment, and there have also been reports of them engaging in insider trading. It isn’t easy to trust such a person as well as their project.
Lies about USDD
Furthermore, the video has pointed out some crucial things that we must note when evaluating USDD. First of all, USDD claims to be an algorithmic stablecoin, and even though the minting and burning of its tokens are paused, for now, the team will resume it sooner or later. It also can't be an algorithmic stablecoin because, in such a coin, the price is managed by burning and minting coins which are currently disabled in USDD. The decentralized part is also a lie, as only a few large organizations are currently allowed to mint USDD by burning TRX tokens.
In addition to that, youtuber found out that out of the $723 million USDD tokens, $683 million were minted by Justin Sun. Can we call a 94% concentration on one hand decentralized? We can’t! The YouTuber thinks Justin founded USDD, so he can offload TRX tokens without affecting the price of the token.
USDD doesn’t look safe when it just has a market cap of $700 million, while UST failed after crossing the $15 billion mark. Another thing common between UST and USDD is the high-interest rates that are unsustainable in the long run. The funny part is that even though Justin says they won’t make the same mistakes as UST, they offer almost double the interest rate at 39.6%. Anyone with the slightest idea about investing would know a 40% risk-free fixed return is too good to be true.
Do you think Tron’s USDD is a scam as Youtuber claims it to be? Let us know in the comments below. Also, if you found our content informative, do like and share it with your friends.