Interpretation of USDD and Smart Allocator | The Most Transparent Stablecoin Strategy

Recently, with the update of the USDD protocol, a new section called Smart Allocator has been launched. A few days have passed, and I found that many friends in the groups actually do not understand this, constantly asking me what it is, whether it is safe, if it will affect PSM, and if there will be losses? So today I still prepared to write another article to explain some basic knowledge about it to everyone.

1/ Will Smart Allocator affect PSM liquidity?

There will be no impact at all. I found a picture for everyone to take a look at; the first picture shows the PSM liquidity for USDD to USDT exchange two days ago, and the second picture shows the current situation, where you can clearly see the changes in the chart.

The reason is that PSM liquidity will be flexibly adjusted according to USDD's TVL and real-time conditions, so there is no need to worry about this. Therefore, there are no issues with the price of USDD, including since its inception, USDD has never had a price depeg for more than 6 hours.

2/ Is there any risk for USDD users with Smart Allocator?

There is absolutely no risk. Because the Smart Allocator protocol clearly states that the user's principal will not be affected at all, and once systemic risks occur, losses will be borne by the protocol.

The reason is that USDD's Smart Allocator is a completely transparent on-chain high liquidity low-risk strategy, ensuring safety is the top priority. Compared to stablecoins in the same field, USDD's strategy is the safest and has the highest level of transparency, and users can check the on-chain reserves at any time on the official website.

3/ Does Smart Allocator have any impact on USDD users?

There is no impact at all. In fact, having an independent strategy for a stablecoin is a very normal and common thing; many stablecoins even do not disclose their strategies, making it impossible for users to trace the real-time dynamics of the reserves.

However, USDD's strategy is completely publicly transparent on-chain and on the official website. Based on the principle of 100% transparency for users, the direction, amount, and addresses of the funds are fully disclosed and can be queried at any time, so there is actually no impact, it can only be said to be more transparent.

In fact, USDD does not need to launch this section to do similar things; even the PSM liquidity on the official website does not need real-time tracking, after all, it is 1:1, and it only needs to ensure exchange liquidity. Doing these things is entirely for providing users with a more transparent, safe, and reassuring experience. From this point, we can also see USDD's determination for the safety of user assets and being supervised.

@justinsuntron @usddio #TRONEcoStar