USDD 2.0 is officially deployed to Ethereum, and the

# Written by Bob, Baihua Blockchain  

At a time when USDT and USDC dominate the market, most people’s attention is focused on centralized stablecoins, but the importance of decentralized stablecoins is often underestimated. Leading institutions such as A16z and Messari have clearly stated in multiple reports that decentralized stablecoins are the cornerstone of the DeFi ecosystem, and thus their irreplaceable role deserves our great attention.  

Recently, we have noticed that the decentralized stablecoin USDD has been deployed on the Ethereum network, while launching a 12% reward program, which has received a warm response from the crypto community. As a "dark horse" in the decentralized stablecoin market, USDD has maintained long-term stable operation and growth since its launch. After its 2.0 version was released in January this year, its circulation exceeded 100 million within two weeks, and its TVL (Total Value Locked) surpassed 600 million US dollars in half a year, showing strong momentum.  

Next, we will focus on the latest developments of USDD and analyze the reasons behind its rapid rise.  

## 01 Half a Year After the Launch of USDD 2.0: A Dark Horse Emerges in the Stablecoin Market  

USDD was first launched by TRON DAO in 2022, positioned as a decentralized stablecoin based on an over-collateralization model. In the early days, USDD failed to achieve large-scale growth due to intense competitive pressure. However, in early 2025, when USDD was upgraded to version 2.0, it introduced enhancements to decentralization, community minting, and smart yield generator functions. This quickly made it the focus of the market and a "dark horse" in the decentralized stablecoin sector.  

According to recent community news, USDD is about to launch a series of major initiatives. Presumably, this is because USDD, which has benefited from the 2.0 upgrade and is in a phase of rapid growth, intends to strike while the iron is hot to maintain sustainable development and growth.  

### USDD’s Social Media Accounts Officially Announce Native Deployment on Ethereum  

It is reported that USDD was officially natively deployed and launched on Ethereum on September 8, 2025. At the same time, a reward program with an APY (Annual Percentage Yield) of up to 12% was launched on the Ethereum mainnet. Specifically, users holding natively issued USDD on Ethereum can enjoy tiered APY, with the highest rate reaching 12%. Users only need to claim the reward once on the Merkl platform after the program ends.  

With the successful experience of the TRON ecosystem, multi-chain deployment will not only expand application scenarios and adoption rates, but also grow the user base while achieving sustainable development. In particular, the Ethereum ecosystem, as the largest DeFi hub currently, provides ample room for USDD to expand.  

According to official information, in the future of multi-chain collaboration, the USDD team has put forward a vision to expand the Smart Allocator to other chains, including Ethereum and BNB Chain. This will make USDD more accessible and bring higher returns.  

Previously, USDD has been integrated into real-world payment use cases through partnerships with payment service providers such as AEON Pay and Uquid. The adoption of USDD in the real world can also bring new use case channels to multi-chain ecosystems like Ethereum and provide more options for users in these crypto ecosystems.  

## 02 Breaking Free from the "Algorithmic Stablecoin" Label: What New Features Does the Upgraded USDD 2.0 Bring?  

Before its multi-chain expansion, many people may have still perceived USDD as the version 1.0 that relied on subsidized yields. In fact, the reason why the USDD team is so confident in launching USDD on multi-chain ecosystems like Ethereum mainly stems from the positive feedback brought by USDD 2.0 over the past six months. So, what new features exactly does the innovatively upgraded USDD 2.0 offer?  

The old version of USDD can be described as a traditional over-collateralized decentralized stablecoin, while USDD 2.0 has mainly achieved significant improvements in security, decentralization, and stability.  

### Key Differences Between the Old and New Versions of USDD  

The upgrade to USDD 2.0 has brought about the changes outlined in the table above. Among these, the introduction of innovative modules such as the Price Stability Module (PSM), Smart Allocator, and Secure Liquidation & Auction Mechanism deserves special explanation:  

- **Price Stability Module (PSM)**: Allows seamless, near-zero-cost exchange between USDD and supported stablecoins (initially USDT). It ensures USDD’s 1:1 peg to the US dollar through arbitrage mechanisms.  

- **Smart Allocator**: Directs idle reserve funds to mature DeFi platforms such as Aave and JustLend to earn and distribute returns for USDD stakers. Simply put, it acts as an intelligent "yield aggregator" for idle funds, shifting from relying on external subsidies to a self-sustaining model where the protocol generates sustainable returns internally. This helps break free from the unsustainable interest rate subsidies of the old version and enables the protocol to generate sustainable internal returns.  

- **Secure Liquidation & Auction Mechanism**: Once the collateral ratio falls below the safety threshold, the system triggers on-chain liquidation and recovers collateral assets through auctions to ensure system stability.  

## 03 What Drives USDD’s Rise?  

In fact, compared with centralized stablecoins, decentralized stablecoins—especially over-collateralized ones—have always been the cornerstone of the DeFi ecosystem. They possess irreplaceable importance due to their transparency, censorship resistance, and role as an on-chain liquidity hub, and will undoubtedly play a significant role in future payment, cross-border, and decentralized financial systems.  

USDD’s rise is no accident. Since the launch of USDD 2.0, it has stood out among numerous decentralized stablecoin competitors. Based on its multiple advantages in innovation, stability, security, and yield-driven growth, it has achieved the possibility of sustainable development:  

### 1. Strong Foundation of the TRON Ecosystem  

Data from Defillama shows that when blockchain networks are ranked by the number of active addresses, TRON ranks first with 2.5 million active addresses. At the same time, TRON’s DeFi TVL also ranks among the top. Of course, USDT—the leading stablecoin—also has the largest circulation on TRON, and the total stablecoin issuance volume of TRON is ahead of other public chains. In general, the TRON ecosystem has a solid foundation, providing fertile "soil" for the development of high-quality projects and applications.  

*Ranking of Blockchain Networks by Active Addresses. Source: Defillama*  

### 2. Innovation  

As mentioned earlier, the Smart Allocator, one of USDD’s core innovations, is also an on-chain yield strategy module. Unlike protocols such as MakerDAO and Frax, which generate returns through real-world asset vaults or staking, the Smart Allocator leverages internal reserves and manages them in a conservative and transparent manner. Users can obtain protocol-based real rewards without additional operations.  

The Price Stability Module (PSM) further strengthens USDD’s 1:1 peg to the US dollar. Decentralized minting and governance return the "right to produce" stablecoins to users, further enhancing community cohesion.  

### 3. Stability and Security  

As DeFi infrastructure, stable price pegging and security are essential for stablecoins. The more stable and secure a stablecoin is, the more sufficient liquidity it will naturally attract. In addition to the stabilizing effect of the PSM and the conservative yield strategy of the Smart Allocator (both mentioned earlier), dynamic collateral ratios and risk management also help resist market volatility. To prevent the system from being overexposed to risks, the capital deployment of the Smart Allocator has set upper limits, and all operations are fully transparent and traceable on-chain.  

Furthermore, relevant contracts and protocols have passed strict audits by the blockchain security firm ChainSecurity.  

### 4. Yield-Driven Growth  

With the support of the TRON ecosystem, the APY of USDD 2.0 can reach 20%. This yield mainly comes from subsidies from TRON DAO, the over-collateralization model, yield subsidy mechanisms, support from TRON’s leading position in the stablecoin market, and the operation of the Smart Allocator—all of which ensure the stability and sustainability of users’ yield sources.  

In addition, the upcoming sUSDD protocol will help USDD users earn interest through a transparent decentralized savings system, serving users who pursue passive appreciation of stablecoin assets.  

## 04 Next Steps in the Roadmap  

According to the roadmap released by USDD, the next step for USDD is expected to involve deployment on more mainstream blockchains, such as BNB Chain, to create more possibilities for adoption and user growth. After entering more blockchain ecosystems, USDD is bound to integrate more stablecoins and other crypto assets, further leveraging the stabilizing effect of the Price Stability Module (PSM), supporting more types of collateral, and injecting new vitality into these ecosystems.  

From the changes in the minting mechanism and governance model of USDD (old vs. new versions), it can be seen that USDD is strengthening decentralized governance. It is promoting the community to gain greater voice and governance rights in decision-making and resource management, driving USDD toward a more autonomous and sustainable protocol.  

By expanding through multi-chain deployment and opening up to more crypto users, USDD has expanded its adoption scope. This is equivalent to giving USDD the potential to become a DeFi infrastructure for the entire crypto ecosystem, opening up greater room for growth.  

## 05 Conclusion  

"One generation plants the trees in whose shade another generation rests." Over the past few years, stablecoin projects that have experienced dramatic ups and downs—such as LUNA—have left valuable experiences and lessons for subsequent projects. USDD has learned from these experiences through continuous upgrades and iterations and is exploring new directions for decentralized stablecoins.  

From its initial form as a single-chain protocol, USDD has gradually grown into a multi-chain DeFi infrastructure that balances innovation, optimization, and community self-governance.  

It can be seen from this that USDD’s goal is to build a transparent, decentralized, and sustainable long-term value protocol. If these strategies can be successfully implemented, USDD is expected to become a representative project in the field of decentralized stablecoins in the future.  

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