KuCoin AMA With USDD (USDD) — How Decentralized Stablecoins Enhance Financial Inclusion and Security

Dear KuCoin Users,

 

Time: March 24, 2025, 10:00 AM - 11:20 AM

KuCoin hosted an AMA (Ask-Me-Anything) session in the KuCoin Exchange Group, featuring Bella, USDD Community Manager.

Official Website: https://usdd.io/

Follow USDD on X, Telegram, and Discord
 

Bella: Thank you for the nice question! Decentralized USD (USDD) is fully decentralized, with all assets and transactions managed by smart contracts rather than centralized institutions. 

 

This eliminates any single point of failure and makes sure that every transaction is visible on-chain for real-time verification. What makes USDD 2.0 stand out:

Smart contract-driven operations: minting and redemption of USDD 2.0 are automated through smart contracts, ensuring trustless and transparent execution.

Over-collateralization: USDD 2.0 maintains a healthy 112.17% collateralization rate (with PSM) and 240% (without PSM), providing a strong buffer against market volatility and reducing de-pegging risks.

Peg Stability Module (PSM): With the PSM that utilizes market arbitrage for stable pricing, our users can swap between USDD and USDT at 1:1 with no fees or slippage.

 

Bella: Yes! Our over-collateralization system is designed to withstand even the most challenging market conditions. With current collateral rates, the system remains stable even with a 20% drop in collateral prices. We've also implemented a dynamic liquidation mechanism - when collateral levels fall below safety thresholds, the system incentivizes users to participate in liquidation, ensuring USDD maintains strong asset backing.

Bella: Currently, we're enhancing cross-chain capabilities with a focus on security through the following:

1. Cross-chain audit and verification: All cross-chain operations undergo a multi-layer verification system to prevent potential vulnerabilities.

 

2. Smart contract security: We carry out regular third-party security audits of our cross-chain contracts to eliminate bug risks.

 

3. Asset protection: We ensure USDD assets on target chains are always sufficiently collateralized during cross-chain transfers to prevent de-pegging.

Bella: Yes, we're actively working to diversify our collateral pool by adding new crypto assets and exploring integration with traditional assets., This expansion will further strengthen USDD's resilience in varying market conditions through risk diversification. For example:

1. Diversified collateral pool: We're planning to introduce more crypto collaterals like ETH and BTC, as well as traditional assets, to strengthen overall stability.

 

2. Flexible collateral framework: Each collateral type has specific requirements designed to maintain system-wide security and stability.

 

Bella: USDT is a leading stablecoin with exceptional liquidity and broad market acceptance, making it an ideal choice for collateral.

The PSM is specifically designed for price stabilization, enabling a 1:1 USDD-USDT swap to keep USDD pegged to the US dollar. Meanwhile, the over-collateralization module prioritizes long-term stability by securing the system with a range of collaterals, creating a solid safety net against market volatility. Though their approaches differ, both modules work together to maintain strong liquidity and price stability for USDD.

For example, when USDD's price fluctuates in the secondary market, the PSM swiftly recalibrates market demand through its 1:1 exchange mechanism between USDT and USDD, keeping it stable. If USDD strays from its peg, the PSM's stabilization function kicks in, leveraging user-driven arbitrage to regulate USDT's liquidity and restore USDD's price anchor.

For extended price security, our over-collateralization module primarily uses TRX and USDT as collateral. Through differentiated minimum collateral rates, USDD can weather prolonged market market turbulence while maintaining stability.

Bella: Let's break it down into three key strengths:

Technology: USDD is multi-chain compatible (TRON, Ethereum, BNB, BTTC), and we'll continue to expand it to more top chains, deliver lightning-fast transactions, and boast near-zero fees.

Ecosystem: We're deeply integrated with top DEFI projects like JustLend and sun.io. Users can tap into lending and mining opportunities when staking USDD to compound their gains.

User experience: We've made staking a breeze—just one click and you're set, making it simple even for beginners. Plus, key features like the vault and PSM are now accessible on mobile, taking convenience to the next level.

Bella: USDD draws in DeFi enthusiasts by offering generous staking yields (up to 20% APY) and seamless 1:1 conversions with USDT. Currently, this staking campaign goes live on multiple exchanges like HTX, KuCoin, Gate.io, EXMO, etc. You may check here.

 

By prioritizing both technology and compliance, USDD ensures asset security while pushing the frontiers of DeFi, establishing itself as a trustworthy and compliant stablecoin.

Besides, platforms like TokenPocket, imToken, and Sunpump have already integrated our PSM, and we're eyeing expansions into lending, derivatives, and other DeFi arenas to broaden the USDD ecosystem. Kindly check this link. 

Bella: The phase II of our 20% APY staking campaign is live on many platforms, and we're very excited to team up with KuCoin to join this staking carnival!

There is no doubt about sustainability. The yield is supported by revenue from the TRON DAO ecosystem, including fees from DeFi and cross-chain transactions. As the ecosystem grows, the revenue streams diversify, avoiding over-reliance on a single source and ensuring that the APY and returns remain sustainable over the long haul.

Bella: True, Regulatory compliance is also one of the top priorities for USDD. Here is how we manage it: 

 

Technical compliance: We maintain transparent audits and publicly accessible on-chain data to satisfy regulators' transparency requirements and enhance the protocol's credibility.

Collaboration and communications: USDD actively engages with regulators and helps shape industry standards, ensuring we always operate within a clear compliance framework.

User education: We'll multilingual tutorials and compliance guides to help global users understand USDD's commitment to compliance and security, which in turn foster greater trust.

 

Bella: Yes, USDD 2.0 was fully audited by ChainSecurity, and we've released the report here, you can check more details here.

Bella: Under the mechanisms like PSM, overcollateralization, vault and liquidation. We comprehensively enhanced the stability, security and transparency in USDD 2.0.

We now have published the Phase II staking campaign with 20% APY, and we're going to make it as a long-term event, from which users can obtain high return in mint and stake USDD on the supported platforms.

 

Bella: Sure! Stay updated by following us on these platforms: X, Telegram, Medium and our official website. 

 

Bella: Yes! In the near future, we will release a brand new DAO mechanism so that our community can join the decision-making part, follow us and stay tuned!

 

Bella: We currently support TRX and USDT and may expand to mainstream assets like ETH and BTC. Asset selection will be carefully evaluated to ensure user security and stability.

 

 

KuCoin and USDD have prepared a total of 2,000 USDD to give away to AMA participants.

 

1. Pre-AMA activity: 800 USDD

2. Free-ask section: 50 USDD

3. Flash mini-game: 400 USDD

4. Post-AMA quiz: 750 USDD

 

Sign up for a KuCoin account if you haven’t done so yet, and ensure you complete your KYC verification to be eligible for the rewards.

 

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