Justin Sun’s USDD Launches on Ethereum, Enters the Stablecoin Battlefield

Justin Sun’s USDD stablecoin launched natively on Ethereum as the community’s stablecoin provide hit $165 billion. The rollout provides a Peg Stability Module for direct USDT and USDC swaps and gives as much as 12% APY rewards.

Despite USDD’s smaller scale versus Tether’s $169 billion dominance, the transfer alerts rising competitors in the $2.5 trillion stablecoin sector.

USDD Launch, Incentives, and Stability Test

USDD is an overcollateralized algorithmic stablecoin initially launched on the TRON blockchain, designed to keep up a greenback peg whereas providing high on-chain yields. Its Ethereum contract went reside on September 8, following a CertiK audit. The Peg Stability Module (PSM) ensures environment friendly liquidity by permitting seamless 1:1 swaps with USDT and USDC.

An airdrop marketing campaign started September 9, rewarding Ethereum customers with tiered yields that begin at 12% and steadily scale down to six% as adoption rises. Rewards accrue constantly and are claimable each eight hours through the Merkl Dashboard.

As Justin Sun wrote on X: “From now on, everybody has a decentralized alternative with regards to stablecoins! USDD is rising! Swap for USDD and be part of mining actions with as much as 12% APY!”

Planned upgrades embrace sUSDD, an curiosity‑bearing model that generates passive yield immediately on-chain. This rollout is positioned as a gap transfer in a bigger multi‑chain enlargement.

USDD additionally reviews a 204.5% collateral ratio. TRX primarily helps the ratio after Sun withdrew $726 million in Bitcoin collateral in August. Although this design goals to forestall destabilization, the token has confronted stress in the previous. It dipped to $0.983 throughout Terra’s 2022 collapse. It fell to $0.97 throughout the FTX meltdown later that 12 months.

Tether’s Dominance and Rising Competition

Tether continues to dominate, with TRON alone processing roughly $23–25 billion in each day USDT transfers, in contrast with round $20 billion on Ethereum. TRON’s circulating USDT sits in the low‑$80 billion vary, whereas Binance controls about $44 billion in stablecoins, or two‑thirds of change reserves. These entrenched positions give Tether unmatched liquidity and world settlement attain.

Still, the market is widening. MetaMask is getting ready to combine its mUSD, Paxos has proposed USDH with income‑sharing options, and EURC and PYUSD have posted fast 12 months‑over‑12 months development. Regulatory frameworks like the EU’s MiCA and the US GENIUS Act additionally open the door for compliant rivals. In Asia, regulatory frameworks are additionally advancing quickly, with jurisdictions similar to Singapore, Hong Kong, and Japan setting extra specific guidelines for stablecoin issuance and oversight to draw institutional adoption.

For USDD, the uphill battle is obvious. With a market cap of solely about $450–$460 million in mid‑September 2025—barely 0.3% of Tether’s—its scale is proscribed. Liquidity on Ethereum has improved via the PSM, however depth nonetheless lags behind USDT and USDC, and reserves stay closely uncovered to TRX value actions.

Although its incentives might entice early adopters, USDD’s lengthy‑time period survival requires deeper liquidity, diversified collateral, and integrations that embed USDD into actual financial use circumstances.

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