Once the stablecoin market falls into a systemic crisis, the project's survival depends on whether its defensive design is sufficiently robust. Why has USDD been able to withstand multiple market fluctuations? It’s thanks to its triple defense line.

First is the most fundamental—over-collateralization. Many stablecoins rely on a single asset or purely algorithmic maintenance, but USDD’s approach is entirely different. It requires that the reserve assets backing it always exceed the total issued amount, which is more than just a numbers game. During the market storm in 2022, USDD’s collateralization ratio once soared above 300%, with reserves holding high-liquidity assets like Bitcoin, USDT, and USDC. In other words, even if some assets in the collateral drop in value, the entire system still has enough buffer space. More importantly, the liquidation process is fully automated—when the collateralization ratio hits a risk threshold, smart contracts will immediately enforce liquidation to protect the pegged exchange rate, minimizing human intervention.

Next is the emergency channel. During panic selling, liquidity is the lifeline. USDD has a built-in PSM module that allows users to directly exchange USDC or USDT at a 1:1 ratio, with zero slippage and instant settlement. The brilliance of this mechanism is that it embeds an endogenous arbitrage tool within the market, helping to stabilize sentiment during panic.

This multi-layered defensive architecture is the competitive advantage that sets USDD apart from other stablecoins.