Justin Sun’s USDD 2.0 Removes Algorithmic Features, Mimics JUST Stable Model

Justin Sun has excitedly trumpeted the launch of the new version of his algorithmic stablecoin, USDD, taking to Twitter to proclaim that it’s “about to launch with a 20% APY.”

Justin Sun has announced the upcoming launch of USDD 2.0, a new version of his algorithmic stablecoin, via a post on X.

“USDD 2.0 is about to launch with a 20% APY, fully subsidized by @trondao,” Sun wrote, adding that “all interest will be sent in advance to a transparent address.”

However, Sun also stated that people should stop asking him questions like “where does the yield come from,” without providing any further explanation.

It is unclear how USDD 2.0 will differ from the current implementation of the stablecoin. The most recent version of USDD's whitepaper is from December 2022, and it states that USDD's stability will come from the project serving in the role “of a decentralized central bank in the industry.”

There have been no recent governance votes for this project, with the last dating to May of 2023. The audit reports for the project also haven't been recently updated, dating to 2022. Humorously, 2022 is also the last time that any new USDD was issued.

Even the USDD Discord has no details about what USDD 2.0 is. However, there is a “Beta” USDD 2.0 website that appears to hint at some of the changes.

According to the website, USDD 2.0 will eliminate many of its algorithmic features and instead become a JUST DAO stablecoin like the JUST stablecoin (USDJ).

“JUST DAO offers a lending protocol that enables users to mint over-collateralized stablecoins (USDD) by depositing Tron chain assets,” a line on the website reads.

It also shows three vaults that appear to correspond to Wrapped Tron, Tether, and CryptoFlow.

Strangely, JustLend DAO doesn't have any governance discussion of this launch of USDD 2.0. Nor does the JUST Stable Governance portal have any proposals related to USDD 2.0.

However, for those still seeking to understand the protocol, there's a documentation website that's currently linked from the beta website. Details are still lacking, but it seems to describe a system that's very similar to JUST Stable and USDJ (which are themselves derivatives of Maker).

Sun appears to be doubling down on the JUST Stable model, even though USDJ hasn't seen substantial adoption, with a total market capitalization of around $23 million. Twenty million of these tokens are currently held in TSF2rqLdrrZG7PZkDxtvu6B2PTpofidMAX, an address included in the reserves for USDD.

Sun has also attempted to allay any concerns about the project's yield by stating that there won't be any issues “simply because we have plenty of money.”

Protos reached out to the USDD contact email address for clarification on these upcoming changes to USDD, but received no response before publication.