Tron Now Has the Third-Largest TVL in Defi — USDD, the Network’s Stablecoin, Faces Skepticism

May 30, 2022

Tron Now Has the Third-Largest TVL in Defi — USDD, the Network's Stablecoin, Faces Skepticism


Tron Now Has the Third-Largest TVL in Defi — USDD, the Network’s Stablecoin, Faces Skepticism

Tron has surpassed Ethereum as the third-largest network in terms of total value locked (TVL) in decentralized finance (defi) protocols this week. Interestingly, the defi protocol Justlend, which is comparable to Anchor Protocol in that it offers more than 20% APY for USDD deposits, owns 48.19 percent of the TVL. With the rise of Tron’s TVL, critics have questioned the network’s stablecoin USDD, pointing out parallels between USDD and Terra’s UST. Tron becomes the third-largest defi blockchain in terms of total value locked on May 30, 2022. Tron’s TVL in defi is $5.94 billion at the time of writing, just behind Binance Smart Chain (BSC) and just over Avalanche (AVAX). Despite the impact of Terra LUNA and UST, Tron’s TVL reached $3.97 billion on May 12, 2022, and the blockchain was rated fifth in terms of TVL size by chains. Tron’s TVL was 16.16 percent lower on that day than it had been on May 5, but once the Terra disaster faded, Tron reclaimed third place in terms of TVL in defi.

Tron’s defi TVL has grown 45.22 percent this month, and it has increased 13.73 percent in the previous seven days. Justlend, a defi protocol, dominates Tron’s TVL, with 48.19 percent of Tron’s aggregate stored in defi hosted on the Justlend application. Justlend has a total worth of $2.86 billion, which has climbed significantly since May 21. Since May 21, $1.08 billion has been invested in Justlend, resulting in a 58 percent rise in the protocol’s TVL. Certik, a blockchain security firm, also performed an assessment on Justlend. USDD deposits on Justlend, like Anchor, pay 23.55 percent APY at the time of writing.

A number of detractors have stated that “USDD is bound to fail,” and there have been several complaints about the project’s resemblance to UST. USDD is not an algorithmic fiat-pegged token notion, according to data scientist Bennett Tomlin.  Tomlin stated, “USDD is not an algorithmic stablecoin.” “The TRD members’ only interaction is to burn TRX in order to obtain USDD. Except that minting is based on the oracle price of TRX, I see no contract going the other way, and no algorithm altering either mechanism. Tron has risen to the top of the decentralised banking sector. Tron’s native token, Tron (TRX), has also done well.


Read more: More than $1.6B abused from DeFi in 2022 so far

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