USDD (USDD)

What USDD is

USDD is a dollar-pegged stablecoin backed by crypto collateral rather than by bank deposits. Its documentation defines it as "a fully decentralized stablecoin pegged to the US dollar, backed by crypto collateral" that operates "without a central authority," and states that it "maintains its 1:1 peg to the US dollar through a system of over-collateralization" (source: USDD documentation, read September 2026).

The documentation also makes a censorship claim that distinguishes it from fiat-backed issuers: "USDD is tamper-proof and cannot be frozen, giving users full control over their assets." That is a design property, not a guarantee about the venues where USDD trades. An exchange can still freeze an account holding USDD.

The version in use today is USDD 2.0. The documentation is explicit that "all references to 'USDD' specifically refer to the new version of USDD," and files the earlier design separately as USDDOLD.

For where to buy USDD from your country or state, see the availability tables on this page and the venues at Exchanges.

How it works

USDD is minted from vaults. A user locks collateral in a vault and draws USDD against it, and the vault must stay above a minimum collateralization ratio. The documentation lists supported collateral as TRX, USDT, WBTC, ETH and sTRX, deployed across TRON, Ethereum and BNB Chain, with each collateral type split into lettered vault classes.

If a vault falls below its minimum ratio it is liquidated. The documentation's worked example applies a 10% liquidation penalty, so a $1,000 debt becomes $1,100 to settle. Every collateral type carries a stability fee of 0.5% annually, charged on the debt rather than on the collateral.

The peg is defended in two directions. Over-collateralization is the structural side: there is more collateral value locked than USDD outstanding, so the system can absorb a fall in collateral prices before the backing is impaired. The Peg Stability Module is the transactional side. The documentation describes it as offering "zero-slippage swaps" and "gas-only transactions," letting holders exchange USDD directly against USDT or USDC "with no service fees." That gives arbitrageurs a fixed-price route to push a stray market price back toward a dollar.

sUSDD is the savings side. The documentation calls it "the yield-bearing version of USDD," built on the ERC-4626 vault standard, and says it is "fully redeemable for USDD at any time" with "no liquidity restrictions." Value accrues to the token rather than being paid out, so a fixed sUSDD balance becomes redeemable for more USDD over time.

The rate on sUSDD is not fixed and not mechanically derived from a single source. The documentation describes a "Dynamic APY Pricing Model" that weighs crypto market benchmarks, Federal Reserve rates, a competitive premium and the protocol's "underlying yield and healthy balance." A published apy on any given day is therefore a policy output, not a measured return.

Behind the savings rate sits the Smart Allocator, which the documentation describes as a protocol-driven strategy that deploys idle capital into external platforms such as Aave to generate yield, with returns "redistributed to users" as staking rewards through what it calls an automated, auditable process, and with the stated aim of reducing dependence on external subsidies.

Governance runs through "decentralized proposals and on-chain voting mechanisms," with the community participating in decisions about how the protocol evolves.

Supply and tokenomics

USDD has no issuance schedule in the way a network token does. Supply expands when users open vaults and mint against collateral, and contracts when they repay and close them, or when vaults are liquidated. The parameters that govern that expansion are the published ones below.

A 120% floor is a thinner cushion than some crypto backed stablecoin designs require, and it is the same floor for a volatile asset like TRX as for USDT. That is a deliberate capital-efficiency choice and it puts more weight on liquidation working promptly.

The total USDD outstanding, the collateral mix actually locked, and the current sUSDD rate all change continuously. Read them from the data on this page or from the protocol's own dashboards rather than from any figure quoted in prose.

History

USDD 1.0, now labeled USDDOLD in the documentation, worked differently. It was "issued by TRON DAO Reserve through whitelisted institutions by burning TRX," and was backed by a reserve basket of BTC, USDT, USDC and TRX. Issuance was therefore gated to approved institutions and the peg leaned on a reserve managed off the protocol rather than on per-user vaults.

USDD 2.0 replaced that with a vault system anyone can use. The documentation summarizes the upgrade as introducing "secure liquidation processes, dynamic collateral ratio adjustments, and enhanced risk management protocols," alongside "community-driven features, empowering users to actively participate in governance." In practice the change moved USDD from a reserve-and-whitelist model toward the collateralized debt position model that defi lending protocols use, with a peg module and a savings vault bolted on.

The Smart Allocator is the more recent addition, and it changes what backs the savings rate. Rather than paying a subsidy, the protocol deploys idle capital into external lending markets and passes the return through. That makes the rate more sustainable in principle and adds exposure to whatever those external platforms do.

Risks and what to watch

Collateral concentration is the specific thing to watch here. TRX appears as three of the seven listed vault classes and sTRX as a fourth, so a large share of the backing can be a single ecosystem's native asset and its staked derivative. When collateral correlates with the chain the stablecoin mostly trades on, a stress event hits the backing and the exit route at the same time.

oracle risk follows directly from that. Every vault's health is measured against a price feed, and the documentation lists a dedicated oracle contract among its developer pages. A stale or manipulated feed can trigger liquidations that should not have happened, or fail to trigger ones that should.

External platform risk arrives with the Smart Allocator. Capital deployed into Aave or a comparable venue earns that venue's yield and carries that venue's smart contract risk. The savings rate is not risk-free simply because it is described as protocol-driven.

The rate itself is discretionary. Because the Dynamic APY Pricing Model weighs a "competitive premium" alongside the underlying yield, a published sUSDD rate can be set above what the underlying strategies currently earn. That is a policy choice the protocol can reverse.

Finally, a depeg is always possible in a collateralized design. Over-collateralization makes the backing robust; it does not fix the market price. If liquidations lag a falling collateral market, or if the Peg Stability Module runs short of the stablecoins it swaps against, the traded price and the redemption value can separate.

Frequently asked questions

What backs USDD?

Crypto collateral locked in vaults, not bank deposits. The documentation lists TRX, USDT, WBTC, ETH and sTRX across TRON, Ethereum and BNB Chain, with every listed vault class requiring a minimum collateralization ratio of 120%.

What does it cost to mint USDD?

The stability fee is 0.5% annually on the debt, across all collateral types. If a vault breaches its minimum ratio it is liquidated with a 10% penalty on the debt.

What is the Peg Stability Module?

A contract that swaps USDD against USDT or USDC at a fixed rate with "zero-slippage swaps" and no service fee beyond gas. It gives arbitrage a direct route to close a gap between the market price and a dollar.

How is the sUSDD rate set?

By a "Dynamic APY Pricing Model" that weighs crypto market benchmarks, Federal Reserve rates, a competitive premium and the protocol's underlying yield. It is a policy rate, it is variable, and it is not a promise.

How is USDD 2.0 different from the original?

The original was issued by TRON DAO Reserve through whitelisted institutions by burning TRX, against a reserve of BTC, USDT, USDC and TRX. The current version lets anyone mint from a collateral vault, and adds liquidation, dynamic collateral ratios, a peg module and onchain governance.

Where can you buy USDD?

Availability depends on your country or US state. See where to buy USDD for the exchanges serving your jurisdiction, and Exchanges to compare fees and kyc requirements.