Ethereum News Today: "USDD Challenges DeFi Status Quo with Yield-Driven Ethereum Debut"

USDD, the algorithmic stablecoin developed by Justin Sun and the TRON DAO Reserve, has officially launched on the Ethereum blockchain, marking a significant step in its evolution toward multi-chain and fully decentralized functionality. The stablecoin is now live on Ethereum with a comprehensive security audit conducted by CertiK and the integration of a Peg Stability Module to facilitate seamless swaps between USDD and other stablecoins such as USDT and USDC [1]. This move positions USDD as a direct competitor to established stablecoins like USDC and DAI by offering a decentralized alternative that leverages smart contracts and market-based mechanisms [1].

A key feature of the Ethereum launch is the yield-bearing incentive structure, offering users up to 12% annual percentage yield (APY) simply by holding Ethereum-native USDD in a compatible wallet. The rewards, which are tiered and depend on the total value locked (TVL), start at 12% and decrease as TVL increases, eventually tapering to 6%. No staking or lockup periods are required, and rewards are calculated daily and claimable every 8 hours via the Merkl Dashboard [1]. Users can also opt for consolidated withdrawals, providing greater flexibility in managing their holdings. This approach aligns with USDD’s broader goal of delivering transparent, on-chain passive income opportunities within the decentralized finance (DeFi) ecosystem [1].

In addition to the yield incentives, USDD has introduced sUSDD, a decentralized savings variant that automatically generates interest while keeping user assets on-chain. This new iteration enhances the stablecoin’s utility by allowing users to earn income without compromising control over their funds. The introduction of sUSDD underscores the project’s commitment to innovation and user empowerment in the DeFi space [1].

Security and trust are central to USDD’s Ethereum deployment, as evidenced by the full audit conducted by CertiK, a leading cryptocurrency security firm. The audit adds a layer of credibility to USDD’s operations, especially in light of the collapse of other algorithmic stablecoins like UST. Despite the audit, independent ratings agency Bluechip has raised concerns, assigning USDD an “F” grade for stability due to an estimated collateralization ratio of 53%. The stablecoin is primarily backed by TRX, the native token of the TRON blockchain, following the withdrawal of $750 million in Bitcoin reserves last year [1]. As of the launch date, USDD is trading at $0.9999, maintaining a near-perfect peg to the US dollar [1].

The timing of the Ethereum launch, announced on September 8, 2025, aligns with broader efforts to integrate USDD into the DeFi ecosystem, particularly through direct minting and swapping capabilities enabled by the Peg Stability Module. Given Ethereum’s dominance in DeFi liquidity and developer activity, the platform is a strategic choice for USDD to expand its user base and functionality. Early adopters are set to benefit from an airdrop initiative starting on September 9, further incentivizing participation and engagement [1].

Source:

[1] USDD Launches on Ethereum with 12% APY and Airdrops (https://coinlaw.io/usdd-launches-on-ethereum-12-percent-rewards-airdrop/)