Algorithmic / under-collateralized stablecoin
USDD (Decentralized USD)'s assessment for RD-F-069 — scored yellow on the v1.7.0 rubric. The evidence below is the curator's reasoning for this score.
Evidence summary #
USDD 2.0 is an over-collateralized CDP design (converted from algorithmic in June 2022), not a pure-algo stablecoin. However: (1) TRX is endogenous collateral (Bluechip: 'invalid'); (2) USDD has two documented depeg events — June 2022 ($0.91–0.97, ~1 week, recovered via ~$2B reserve deployment) and March 2023 ($0.92, SVB contagion); (3) the Bluechip F rating characterizes the design as effectively under-collateralized and recommends against holding USDD; (4) the governance portal removal and no remaining DAO means reserve management is fully discretionary; (5) subsidized yields (historically up to 20%; currently ~4.75% via JustLend supply mining Phase XVI) create artificial demand that masks underlying adoption weakness. Not red (not pure-algorithmic; has PSM mechanism; has some exogenous USDT reserves); yellow for documented peg fragility, disputed effective collateral quality, and endogenous collateral concentration.
Sources #
- URLUSDD Depeg — SVB Contagion (March 2023) — CoinGapeCoinGape — Stablecoins in trouble: USDC, DAI, USDD depeg as SVB crisis deepens (March 2023)retrieved 2026-05-17
- USDD's TRON DAO Reserve Shuts Down Its DAO — ProtosProtos — TRON DAO Reserve shuts down its DAO governance portalretrieved 2026-05-17
- TRON's USDD Loses Dollar Peg — CoinTelegraphCoinTelegraph — TRON's USDD loses dollar peg (June 2022, suspected Alameda selloff)retrieved 2026-05-17
- USDD Upgrades to Over-Collateralized — TRON DAOUSDD upgrades into first over-collateralized decentralized stablecoin — TRON DAO blog (June 2022)retrieved 2026-05-17
Methodology #
Classify whether the protocol is an algorithmic or under-collateralized stablecoin design per curator classification.
See the full factor methodology and distribution across all protocols →