Currently, the crypto market is worrying over the underperforming USDD as the stablecoin continues to trade under $1. Investors are still yet to figure out if they would face any risk due to the de-pegging coin.
Justin Sun’s stablecoin dropped down to the $0.93 level on June 13 before pumping back to the $0.98 price level. At the time of publication, the 24 hours price chart showed that USSD was trading at $0.978 after pumping by 0.35%.
Initially, the coin traded at a market cap of $723 million. However, after it started de-pegging, its market cap is currently at the $704 million price level.
Analysts Claimed USDD Is Centralized
According to reports, the team behind the USDD project stated that it is a decentralized cryptographic algorithm. However, many crypto analysts reportedly argued that the stablecoin is a centralized coin.
They added that its minting procedures are not in any form similar to that of other stablecoins like USDC. They continued that it is somewhat private as only a few institutions already whitelisted are authorized to mint USDD. Minting is done by burning TRX coins.
Justin Sun Would Dump USDD Soon
Furthermore, a YouTube crypto analyst, Coffeezilla, stated that it was still uncertain if the assets would be deployed or not. He pointed out that the team has been using the same BTC wallet for a couple of years now.
He further stated that since it was not a new DAO wallet, it might be Sun’s personal BTC wallet. The YouTuber revealed that Justin Sun had personally minted about 94% of the USDD of the stablecoin’s total circulating volume.
He said a particular wallet address reportedly belonging to Sun issued about 683K USSD. The amount was said to be equal to about 94% of the entire USDD ever minted.
Furthermore, he allegedly described USDD as a honeypot targeting retail traders which would be dumped by the Sun later on. However, According to statistics, Tron has stored up a whopping sum of $2.31 billion in diverse cryptos in its DAO reserve.
Hence, the project reportedly boasts that USDD is quite secure as they have a buoyant liquidity pool to back it up. It also claimed that it has many cryptos like BTC, USDT, TRX, and others in its portfolio.
Also, The ratio of collateral assets to that of USDD circulating volume was set at a 130% rate. Depicting that the collateralized assets are way higher than the total USDD volume itself.