Collateralization under stress

Evidence summary #

Effective collateral ratio is well below 100% once endogenous assets are excluded. Bluechip's independent assessment (last updated Oct 2025) finds: (1) TRX and sTRX are classified as endogenous collateral (issued by the same entity — TRON Foundation/Justin Sun — as USDD) and therefore 'invalid collateral'; (2) after excluding endogenous assets, USDD is under-collateralized with effective CR below 100%. Bluechip cites approximately 53% effective collateralization vs. USDD's claimed 200–300%. The Aug-2024 unilateral removal of ~12,000 BTC (~$726M) from reserves without DAO vote left the reserve 'now 100% backed by TRON except for $20M USDT' (Protos/Decrypt). The circular TRX collateral problem: if USDD faces a confidence crisis, USDD selling pressure depresses TRX price (USDD holders dump TRX to exit), reducing collateral value precisely when defense is needed. This is structurally similar to the LUNA/UST death spiral, just with a slower feedback loop. A 50% TRX price decline would push

Sources #

Methodology #

Determine whether under curator-defined stress scenario (top-3 collateral assets drop 50%), protocol net collateralization falls below 110%.

See the full factor methodology and distribution across all protocols →