Tron DAO Reserve (TDR), the organisation in charge of the Decentralized USD (USDD) stablecoin, has announced that Wintermute is its newest member.
Wintermute, one of the biggest crypto trading businesses, will be one of nine entities whitelisted by the DAO that may manufacture and redeem USDD. According to the media statement, the company would also engage in further efforts to stabilise the USD’s value.
“With this position, Wintermute will be able to work with the Reserve to create and destroy US Dollars. As a Member and Whitelisted Institution, Wintermute will advise the TDR and give suggestions to improve, expand, and provide general assistance for the USDD network “TDR said in a Tuesday press release.
The USDD stablecoin has an algorithmic minting and burning system. The whole quantity of USD is created using $1 worth of Tron (TRX), the native cryptocurrency of the Tron blockchain, which is USDD’s sister coin. By its design, when the USDD price falls below the $1 goal, users may burn USD to mint TRX, restoring the USDD price to the $1 target.
The stipulation is that only certain parties are granted the exclusive right to exchange UST and TRX. These institutions are known as whitelisted parties, with Wintermute being the most recent. So yet, no redemptions have been made.
Wintermute is one of the most prominent crypto market makers on controlled and decentralised crypto exchanges, trading billions of dollars each month. The company will join Alameda Research, Amber, Ankr, FalconX, Poloniex, Mirana, Multichain, and TPS Capital as members of the Tron DAO.
In addition to the mint and burn method, the USDD stablecoin is supported by centrally managed reserves. This reserve consists of several tokens whose combined value exceeds USDD’s and is kept as collateral to support the stablecoin in the event of a bank run.
The current market valuation of USDD is significantly more than $745 million, yet the DAO maintains around $2.3 billion in collateral reserves, representing a 300 percent over-collateralization ratio. Long-term, TDR wants to accumulate $10 billion for its resources.