The Tron ecosystem has no intention of abandoning the algorithmic stablecoin USDD despite the recent collapse of UST and LUNA.
According to Justin Sun, founder of the project, the Terraform Labs product was ruined due to too rapid growth and lack of sufficient funds in the reserve fund.
He has said:
"I still believe in algorithmic stablecoins. The crypto industry is going to evolve and algorithmic stablecoins have got to be there. We just need more sophisticated and well-planned structures. Thinking about things like leverage, growth and risk."
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According to him, the Terra ecosystem did not collapse because the concept of algorithmic stablecoins is not viable. He has explained that LUNA was heavily leveraged and had grown to an "impressive market capitalization" too fast.
Sun has said:
"When we designed USDD, we focused on the healthy growth of USDD. We want to keep our USDD market cap relatively small compared to TRX and total market cap. And also at the same time, smaller than the Tron DAO Reserve."
The TRON DAO Reserve has this month started buying BTC and TRX to back USDD. Sun has said that the DAO has also acquired the "classic" stablecoins USDT, USDC and TUSD.