Ethereum News Today:

Justin Sun’s USDD stablecoin has launched on Ethereum, marking a strategic expansion beyond its native TRON blockchain and entering one of the most competitive arenas in the stablecoin space. The move comes as Ethereum’s stablecoin supply has hit a record $165 billion, creating a window for USDD to tap into the ecosystem while directly competing with Tether, which maintains a dominant $169 billion market cap. The Ethereum deployment includes a Peg Stability Module, allowing 1:1 swaps with USDT and USDC to mitigate liquidity risks. The contract went live with immediate swap functionality, enabling seamless transitions between the tokens [1].

To incentivize adoption, USDD has introduced a tiered airdrop campaign offering up to 12% APY rewards for Ethereum users. The rewards begin at 12% for lower total value locked (TVL) and scale down to 6% as adoption grows. These rewards are distributed every eight hours via the Merkl Dashboard, based on daily snapshots. The initiative aims to accelerate on-chain engagement while offering a high-yield alternative to Tether and USDC [2].

The stablecoin operates on an overcollateralized algorithmic model, with a 204.5% backing ratio, primarily supported by TRX tokens. In August, Sun removed $726 million in Bitcoin collateral, shifting the collateral base entirely to TRX. This approach, while aiming to avoid destabilization, has exposed USDD to volatility, as seen during Terra’s 2022 implosion and the FTX collapse, when the token dipped to $0.983 and $0.97, respectively. However, USDD has maintained its peg through these major depegging events, a resilience that may appeal to cautious investors [1].

Tether’s dominance in the stablecoin market remains formidable. Its daily trading volume on Ethereum is significantly higher than USDD’s, and its presence on TRON alone accounts for $23–25 billion in daily transactions. Tether also benefits from near-universal exchange support across both centralized and decentralized platforms. In July, TRON surpassed Ethereum in USDT liquidity, holding $80.8 billion compared to $73.8 billion on Ethereum, further highlighting the entrenched position of Tether in the sector [2].

Despite the odds, USDD is positioning itself as part of a broader trend of diversification and innovation in the $2.5 trillion stablecoin market. Competitors such as MetaMask’s mUSD, Paxos’ USDH, and emerging EURC and PYUSD have also been gaining traction. Regulatory frameworks in the EU and the US, including MiCA and the GENIUS Act, are also opening the door for compliant stablecoins, creating a more competitive and regulated environment. In Asia, Singapore, Japan, and other markets are also advancing stablecoin regulations, potentially offering fertile ground for USDD’s growth [2].

Looking ahead, USDD plans to introduce sUSDD, an interest-bearing version of the stablecoin that will enable passive yield generation directly on-chain. The Ethereum deployment is part of a multi-chain strategy, with USDD already available on 10 blockchain networks, including BSC, Avalanche, and Polygon. Cross-chain bridges from Stargate Finance, Symbiosis, and DeBridge further support this expansion. However, USDD’s long-term success will depend on liquidity depth, diversified collateral, and integration into real economic use cases beyond speculative incentives [1].

Source:

[1] Justin Sun's USDD Stablecoin Launches on ... (https://finance.yahoo.com/news/crypto-billionaire-justin-sun-usdd-214614186.html)

[2] Justin Sun's USDD Launches on Ethereum, Enters ... (https://www.mitrade.com/insights/news/live-news/article-3-1106263-20250909)