Justin Sun’s open letter: Establishing TRON DAO Reserve and issuing stablecoin USDD

Original article: Justin Sun

Compiled by: Zeqi YI

An Open Letter to the Community on the Establishment of the TRON DAO Reserve

The blockchain industry is experiencing a completely laissez-faire free market economy similar to the Gilded Age in the United States. In the 20th century, the United States was the only major country in the world without a central bank. In the end, the United States was hit hard by the financial crisis in 1907. The financial crisis destroyed the industrial development achievements made by the United States in the 19th century, and finally made the United States realize that the development of industry requires macroeconomic regulation and protection from the central bank. Therefore, President Wilson signed the Federal Reserve Act on December 23, 1913.

We realize that the development of the blockchain industry also requires a decentralized central bank. Allowing the herd stampede in the open market without any macro-control will eventually harm the interests of everyone in the blockchain industry. The blockchain industry has experienced short-term extreme market events such as September 4, March 12, and May 12, and has also experienced a long bear market from 2014 to 2017 and 2018 to 2020. The lack of market guidance and liquidity release protection from the central bank has caused great damage to the interests of a large number of blockchain market participants. Today's blockchain industry is already an open financial market of more than one trillion US dollars. We believe that the time is ripe to establish a decentralized central bank.

As a market participant, I personally released a large amount of liquidity during short-term extreme market events such as September 4, March 12, and May 12, and publicly purchased more than 3 billion US dollars of cryptocurrency in the market, which helped stabilize the market to a certain extent. However, the participation of personal funds cannot compare to the power of decentralized organizations after all. Through the decentralized DAO system, the power of the entire blockchain participants will be used to establish a blockchain decentralized central bank, which will become the most steadfast protector of the blockchain industry and market, and will be the best solution to future crises.

After four long years of development, the TRON blockchain has become the world's largest stablecoin network, with a total size of on-chain stablecoins and financial assets exceeding US$55 billion, and a cumulative clearing and settlement volume of US$4 trillion. The TRON network is willing to take the lead in establishing the TRON DAO Reserve to take the first step in the development of a decentralized central bank in the industry.

The main purpose of the establishment of the TRON Fed is to protect the blockchain industry and market, alleviate extreme and long-term downward trends, and resolve panic issues caused by the financial crisis. Its main functions are to stipulate the risk-free interest rate of stablecoins in TRON and other blockchain networks, regulate the market by releasing and tightening liquidity, protect the exchange rate stability of centralized and decentralized stablecoins in TRON and other blockchain networks, formulate and implement monetary policy and exchange rate policy, assume the responsibility of the lender of last resort, safekeep and issue financial reserve assets of TRON and other blockchain networks and other blockchain financial institutions, maintain the stability of the entire blockchain industry and financial market, and control blockchain financial systemic risks.

At the beginning of its establishment, the TRON Joint Reserve will preserve and host $10 billion of highly liquid assets raised by blockchain industry initiators as early reserves, and all reserves will enter the TRON Joint Reserve in the next 6-12 months. In the future, it will continue to absorb more liquid assets as financial reserves to better play the role of a decentralized central bank. The TRON Joint Reserve will also absorb more whitelisted institutions as shareholders of the TRON DAO Central Bank to better fulfill the responsibilities of a decentralized central bank. The TRON DAO Central Bank will also serve as an initial custodian to maintain the USDD authority management of the TRON decentralized stablecoin, and guarantee the stability of the USDD exchange rate and the decentralization of USDD with reserve financial assets.

An open letter to the community regarding the issuance of TRON’s decentralized algorithmic stablecoin USDD

The blockchain world has always been striving to decentralize everything that is centralized, because after all, our faith is always in mathematics and algorithms, not violence and power. Now, we have the possibility of decentralizing the most centralized part of the blockchain world.

TRON DAO will work with mainstream institutions in the blockchain industry to launch USDD, Decentralized USD, the most decentralized stablecoin in human history, which uses mathematics and algorithms to achieve human financial freedom and exists forever without relying on any centralized entity.

In the history of blockchain, stablecoins have gone through the 1.0 era dominated by Omni chain USDT, the 2.0 era dominated by Tron USDT, and now the blockchain is about to usher in the 3.0 era dominated by Tron USDD.

In the 1.0 era dominated by Omni chain USDT, stablecoins did not have their own blockchain and could only rely entirely on the Bitcoin blockchain. The entire stablecoin transfer took a long time, more than 30 minutes, and the fees were extremely high. It often cost a hundred dollars to complete the transfer. The daily production capacity of the entire blockchain was compressed to 200,000 transactions per day. The overall stablecoin scale was US$1 billion, and the main reserve US dollars were redeemed, managed and reserved by centralized institutions.

In the 2.0 era dominated by TRON USDT, USDT migrated to the TRON blockchain across the ages and has an independent decentralized clearing layer. The transfer time has been compressed from 30 minutes to less than one second, and the fee has been compressed from $100 to the cent level, which is close to zero. The daily production capacity of the overall blockchain has jumped to 10 million transactions per day, and the daily clearing volume has exceeded $10 billion. Since its launch in 2019, the total clearing volume of TRON USDT has exceeded $4 trillion. It can be said that since the launch of TRON USDT four years ago, it has become the world's largest stablecoin network, with the overall scale of stablecoins and financial assets on the chain exceeding $55 billion. Although the stablecoins in the 2.0 era have reached the standards of high speed, low fee, and high scale, the reserves of stablecoins are still redeemed and managed by centralized institutions.

After achieving success in the TRON USDT 2.0 era, TRON DAO revolutionized itself and made every effort to create TRON USDD, pushing the development of global stablecoins to a new level, creating a completely decentralized stablecoin that believes in mathematics and algorithms, and built on the most efficient and low-cost stablecoin network currently available to mankind, allowing human stablecoins to enter the stablecoin 3.0 era dominated by TRON USDD.

In the 3.0 era dominated by TRON USDD, USDD will continue to maintain the high-speed, low-fee, and high-scale model standards of USDT in the 2.0 era, but the stablecoin itself no longer relies on centralized institutions for redemption management and reserves, but is completely decentralized on the chain, and is decentralized and pegged to the standard currency TRX on the chain. When the price of USDD is less than 1 USD, users and arbitrageurs send 1 USDD to the system in a decentralized manner and receive 1 USD worth of TRX. When the price of USDD is greater than 1 USD, users and arbitrageurs send 1 USD worth of TRX to the system in a decentralized manner and receive 1 USDD. Regardless of market conditions, the USDD protocol will maintain the market exchange rate of USDD at the target 1:1 exchange rate in a decentralized manner.

TRON USDD will be officially issued and put into circulation on May 5, 2022. It will also circulate on Ethereum and BSC through the BTTC cross-chain protocol. We also hope that mainstream institutions in the blockchain industry will strongly support the three versions of USDD, namely TRON, Ethereum, and BSC.

The development of TRON USDD will be divided into four versions: 1.0 Space, 2.0 Tiangong, 3.0 Moon, and 4.0 Mars, symbolizing the four goals of human beings and TRON in participating in space exploration in the future. In the 1.0 Space version, the development of TRON USDD will be fully entrusted to the TRON DAO Reserve to manage in conjunction with mainstream industry institutions. At the beginning of its establishment, the TRON DAO Reserve will preserve and host $10 billion of highly liquid assets raised by blockchain industry promoters as early reserves to maintain the exchange rate stability and rigid interest rate payment of TRON USDD. At the beginning of its establishment, the TRON DAO Reserve will set the basic risk-free interest rate of USDD at 30%, and coordinate the relevant decentralized and centralized institutions that receive USDD to implement this interest rate.

Decentralized stablecoins no longer need the regulatory standards required by centralized institutions, and can be held without any threshold. Decentralized stablecoins will not have the freezing and confiscation authority of any centralized institution, and private property will be inviolable in the full sense. Decentralized stablecoins will not have the characteristics of large fluctuations in cryptocurrencies, and can achieve the purpose of preserving and increasing the value of wealth in the greatest sense. It can be said that TRON USDD is a small step in the development of TRON stablecoins, but a big step for mankind to achieve ultimate financial freedom.

Our ultimate vision is to make finance a human right, to make financial services, like water and air, a basic right that everyone in the world can enjoy freely, rather than a tool of oppression, sanctions and punishment in today's increasingly complex international situation. Human beings should not only have the four freedoms defined by Roosevelt, including freedom of speech, freedom of belief, freedom from poverty and fear, but more importantly, the fifth freedom, financial freedom, wealth freedom, and the freedom to enjoy their private property without infringement!

I believe that TRON USDD will be one of the most steadfast cornerstones for defending the fifth freedom of mankind! I deeply hope that TRON USDD can become the greatest contribution of TRON DAO to world financial freedom since TRON USDT! Let us work together to bring the fifth freedom of seven billion people around the world to you as soon as possible!