• TRON DAO pulled 12,000 Bitcoin worth $732 million from the USDD stablecoin reserve.
• The move was carried out without a DAO vote, striking fears as investors pointed out its similarity to UST before its collapse.
• Justin Sun urged investors not to worry and reassured them of the safety of USDD.

The crypto community showed concerns about the USDD stablecoin on Thursday after the Tron DAO withdrew $732 million worth of Bitcoin from its reserve. This stirred fears as users reminisced about similar events prior to the implosion of the UST stablecoin.

Justin Sun responds to fears surrounding USDD

TRON's DAO, which oversees the USDD stablecoin reserve, sparked fears among investors on Wednesday after withdrawing 12,000 Bitcoin valued at $732 million from its reserve pool. The move fueled concerns about the decentralization of USDD as it was carried out without a DAO vote.

USDD stablecoin was launched in 2022 as one of the major alternatives to Terra's UST stablecoin before its crash. USDD is backed by several assets in the TRON reserve, controlled by the network's DAO. However, there has rarely been any activity by the DAO on decisions regarding the stablecoin, causing users to doubt the integrity of the network's decentralized system.

Users also drew similarities between USDD and Terra's UST stablecoin before its collapse in 2022. However, Tron's founder, Justin Sun, released an X post explaining that the Bitcoin withdrawal was due to USDD's collateralization rate exceeding the threshold set by the "system." He highlighted that USDD's collateralization rate exceeding 300% isn't "capital utilization efficient."