9th September 2025 – (New York) Justin Sun’s USDD stablecoin has officially debuted on the Ethereum blockchain, marking a significant expansion from its original TRON base to challenge Tether’s market dominance. This launch comes as Ethereum’s stablecoin supply has reached a historic high of $165 billion, providing a prime opportunity for USDD to tap into the largest decentralised finance ecosystem, although Tether continues to lead with a market cap of $169 billion.
USDD’s multi-chain rollout includes an airdrop campaign offering Ethereum holders up to 12% annual percentage yield (APY) rewards. However, the project faces significant challenges, as Tether’s market capitalisation is 367 times greater than that of USDD.
The stablecoin, operated by the TRON DAO Reserve, employs an overcollateralisation strategy with a backing ratio of 204.5%, mainly supported by TRX tokens. This follows Sun’s decision to remove $726 million in Bitcoin collateral in August.
The Ethereum deployment, which has been audited by CertiK, introduces a Peg Stability Module that facilitates 1:1 swaps with USDT and USDC, aiming to enhance liquidity. This mechanism has been developed with lessons learned from the collapse of Terra’s algorithmic stablecoin, although USDD has previously withstood significant depegging events, including drops to $0.983 during Terra’s May 2022 crisis and $0.97 amid FTX’s November collapse.
The launch also features tiered rewards, starting at 12% for low total value locked and decreasing to 6% as adoption rises. Distributions will occur every eight hours via the Merkle Dashboard based on daily snapshots.
The contract address has been activated with immediate functionality for USDT and USDC swaps, and future plans include the introduction of sUSDD, an interest-bearing version aimed at passive yield generation.
Beyond its DeFi integration, USDD’s presence on Ethereum spans 10 blockchain networks, including Binance Smart Chain, Avalanche, and Polygon, supported by cross-chain bridges from Stargate Finance, Symbiosis, and DeBridge.
Despite these advancements, Tether’s dominance in the stablecoin market remains formidable. Its daily trading volume surpasses that of USDD by a staggering factor of 23,500 and enjoys widespread support across both centralised and decentralised exchanges. Recent data from CryptoQuant indicated that TRON had overtaken Ethereum in USDT liquidity, with $80.8 billion compared to Ethereum’s $73.8 billion.