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Cryptoknowmics 2022-06-25 15:05:16

YouTuber Calls Tron’s USDD Stablecoin the Next LUNA Ponzi Scheme

Tron blockchain’s newly launched USDD stablecoin is called the next ‘LUNA Ponzi Scheme’ by notable crypto YouTuber Coffeezilla amid the stablecoin performing below the $1 peg for the past two weeks. Will Tron Suffer the Same Fate as LUNA? In a YouTube video posted on Friday, Stephen Findseisen, a.k.a. Coffeezilla has warned crypto enthusiasts that they should be wary of their investments in USDD stablecoin and this could be the next LUNA Ponzi Scheme. In a separate post on Twitter, the noted YouTuber started by saying that while USDD claims to be an algorithmic stablecoin, it isn’t either of those things as its minting and burning feature is turned off. Also, only whitelisted institutions can mint new USDD by burning Tron, but can’t go back the other way, proving it’s completely centralized. While it claims to be an algo-stablecoin, and "decentralized", it isn't either of those things yet… the mint/burn feature is turned off, and only whitelisted institutions can mint new USDD by burning Tron, but can't go back the other way. (centralized!) pic.twitter.com/deDARk6C7f — Coffeezilla (@coffeebreak_YT) June 24, 2022 According to him, this is good for USDD, because it can’t go through an algorithmic death spiral like LUNA. However, he also noted that without an arbitrage mechanism, this could make it completely unstable. Justin Sun, The Next Do Kwon? Coffeezilla further points out that Tron DAO Reserve claims to back $2 billion wor...

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