Crypto Sleuth Warns That Justin Sun’s USDD Is Following Path of Terra’s UST
Self-proclaimed Internet detective, Cofeezilla has said Justin Sun’s new algorithmic stablecoin, USDD, is towing the path of becoming the next LUNA/UST.
![](data:image/svg+xml;utf-8,<svg xmlns="http://www.w3.org/2000/svg" width="1280" height="720" />)
In a Twitter thread and YouTube video, he said that the USDD stablecoin, which currently has a market cap of $723 million, is far from being the algorithmic and decentralized stablecoin it claims to be. According to him, it’s neither of those things.
USDD is similar to the LUNA/UST double tokens design in that users must burn Tron TRX to mint it. But the difference here is that only white-listed institutions can mint the USDD. In addition, the mint/burn is turned off, so it’s impossible to burn USDD for TRX.
In his view, this is great for USDD since there’s no arbitrage mechanism that could cause an algorithm death spiral. But it also means the absence of arbitrage makes the stablecoin unstable.
10 comments