After Terra's algorithmic stablecoin completely collapsed in May, TRON this morning announced its plan to significantly increase the amount of capital backing its stablecoin and the amount of Bitcoin in reserve.

Initially almost identical to Terra's algorithmic stablecoin UST, USDD arrived on the TRON Blockchain on May 5. According to Justin Sun, founder of TRON, USDD, which was originally designed to algorithmically hedge its pegged to the US dollar, will now be extra collateralized.

Sun said that a reserve of cryptocurrencies and other stablecoins has been collected and this reserve will be at least 130% of the total amount of USDD issued.

TRON described this collateral rate as “guaranteed” and said that from June 5th, TRON DAO Reserve will begin posting real-time updates on the collateral rate on its website.

According to a TRON spokesperson, they hold 14,040 Bitcoins (approximately $418 million), 140 million USDT and 1.9 billion TRX, as well as 8.29 billion TRX in a burn contract.

A TRX spokesperson said:

   “We want to upgrade USDD to a hybrid model. So on one side we will have an algorithm to keep the stablecoin stable and on the other side we will have TRON DAO reserves.”

TRX founder Justin Sun thinks there is still hope for USDD in these days when algorithmic stablecoins are struggling.

Tron Trx

However, USDD had recently reached a total circulation of $667 million. Sun said the following about his reserves:

   "The reserve support we currently use is highly diversified. It includes Bitcoin and different types of stablecoins. USDC (Circle's stablecoin) will be part of our reserve, but only a small part of our reserve."

TRON stated in its press release that the cryptocurrencies in its reserve are Bitcoin, TRX, USDC, USDT, TUSD and USDJ.

“All Bitcoin addresses will be confirmed by signature so everyone will know that these BTCs belong to us,” Sun added.