In brief

  • Terra’s stablecoin tokenomics led to the network’s collapse.
  • Tron’s algorithmic stablecoin playbook looks strikingly similar.

Tron blockchain creator Justin Sun announced via Twitter today that traders can now earn rewards for depositing the network’s recently launched USDD, an algorithmic stablecoin designed to work like Terra’s all-but-defunct UST, to Tron-based lending protocol JustLend.

For depositing USDD, they’ll earn yield in both USDD and the JUST stablecoin. 

JustLend is a lending protocol on Tron akin to, say, Compound on Ethereum. But whereas Compound currently offers APY rates mostly in the low single digits, JustLend is advertising rates as high as 30%—though JUST also pointed to 70% earnings, and the rate has been adjusting throughout the day. (Tron representatives have not yet responded to a Decrypt request for comment on how the yield works.) That’s about 10 to 20 percentage points more than Terra’s own lending protocol, Anchor, was offering before a liquidity crisis there led to a bank run that took down the network

Tron’s move is straight out of the Terra playbook—at least the one that was written before Terra’s native token LUNA and UST stablecoin collapsed.

Last month, Sun announced that Tron DAO, the ostensibly user-controlled organization that makes governance decisions about the network, would begin issuing a decentralized stablecoin backed by TRX. 

Wrote Sun at the time: “When USDD’s price is lower than 1 USD, users and arbitrageurs can send 1 USDD to the system and receive 1 USD worth of TRX. When USDD’s price is higher than…

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