USDD 2.0 has no whitepaper, no governance, and 20% yield

Justin Sun has excitedly trumpeted the launch of the new version of his algorithmic stablecoin, USDD, taking to X to proclaim that it’s “about to launch with a 20% APY.” However, he insists that people stop asking where the yield comes from.

Strangely, it’s hard to determine with any amount of precision how USDD 2.0 will differ from the current implementation.

The most recent version of the coin’s whitepaper dates to December 2022 — more than two years ago. It posits that its stability will come from the project serving in the role “of a decentralized central bank in the industry.”

Even more strangely, there are no recent governance votes for this project, with the last dating to May of 2023.

The audit reports for the project haven’t been recently updated either, dating to 2022. Humorously, 2022 is also the last time that any new USDD was issued.

Even the USDD Discord has no details about what USDD 2.0 is.

However, there is a “Beta” USDD 2.0 website that appears to hint that it will eliminate many of the algorithmic features of USDD, instead making it a JUST DAO stablecoin like the JUST stablecoin (USDJ).

This is based on a line on the website that notes that “JUST DAO offers a lending protocol that enables users to mint over-collateralized stablecoins (USDD) by depositing Tron chain assets.”

It also shows three vaults that appear to correspond to Wrapped Tron, Tether, and CryptoFlow.

Strangely, JustLend DAO doesn’t have any governance discussion of this launch of USDD 2.0. Nor does the JUST Stable Governance portal have any proposals related to USDD 2.0.

However, for those still seeking to understand the protocol, there’s a documentation website that’s currently linked from the beta website. Details are still scarce, but it seems to describe a system that mimics JUST Stable and USDJ (themselves derivatives of Maker).

Sun seems intent on doubling down on the JUST Stable model, despite the fact that USDJ hasn’t seen substantial adoption, with a total market capitalization of approximately $23 million. Twenty million of these tokens are currently in TSF2rqLdrrZG7PZkDxtvu6B2PTpofidMAX, an address included in the reserves for USDD.