Question 1

What is USDD?

Accepted Answer

USDD is the token name for Decentralized USD. Official materials define the new version of USDD as a decentralized stablecoin pegged to the U.S. dollar and supported by crypto-asset collateral; the USDD referred to in this FAQ is this new-version mechanism. “Stablecoin” describes its peg target and system design; it does not mean its market price will necessarily always equal US$1. The use, minting, and redemption of USDD must be understood in conjunction with the specific deployed network and protocol modules.

Question 2

What is the relationship between USDD and the U.S. dollar?

Accepted Answer

The goal of the new version of USDD is to maintain a 1:1 peg to the U.S. dollar, rather than to promise that its secondary-market price will not fluctuate. The official architecture uses crypto-asset collateral, treasury debt management, and the Peg Stability Module as the main components for maintaining system operation. When market trading, collateral-asset values, or module availability change, USDD’s market trading price may still deviate from the target price. The peg target describes the pricing relationship the protocol seeks to maintain; it is not equivalent to being able to transact at a fixed price at all times.

Question 3

How can USDD be minted?

Accepted Answer

Under the treasury path, users first deposit collateral assets accepted by the system, then establish a collateralized position and mint USDD according to the rules. The minted USDD corresponds to debt in the position, so minting is not an unconditional addition of balance but is linked to collateral and collateral-ratio requirements. Collateral-ratio requirements vary with the volatility of the collateral asset. Fluctuations in collateral value change a position’s safety, so before minting, users must not only confirm acceptable assets but also understand the collateral ratio and subsequent position-management conditions.

Question 4

How do you close a position after minting USDD?

Accepted Answer

To close a treasury position, the user must repay the USDD debt minted by that position and the applicable stability fee. Only after the debt is settled can a position that meets the system conditions release the collateral assets previously deposited. This step distinguishes “holding USDD” from “closing one’s own treasury debt”: debt repayment addresses the liability of the corresponding position; the stability fee is a cost generated under system rules during the period in which that debt is maintained. Until debt repayment and fee settlement are completed, the position cannot be regarded as settled.

Question 5

What role does the PSM play in USDD?

Accepted Answer

PSM is the Peg Stability Module, which enables USDD to be exchanged for designated stablecoins at fixed ratios set by the protocol. The module provides an in-protocol conversion path distinct from market buying and selling, and operates alongside a reserve pool. During PSM exchanges, the system mints or burns USDD according to the architecture rules: when the module needs to provide USDD, a corresponding minting process occurs, while reverse exchanges involve a burn process. Its role is to support peg and liquidity management; it should not be understood as guaranteeing unconditional redemption for all assets and all networks.

Question 6

How does USDD’s supply change?

Accepted Answer

USDD does not have a fixed total supply. When debt is created in a treasury and USDD is minted, system supply increases; when a user repays treasury debt, the related USDD exits that debt cycle. PSM exchanges also participate in supply changes because their process includes USDD minting or burning. Therefore, when assessing supply, do not look only at a single transaction or treasury; distinguish the treasury debt path from the PSM exchange path.

Question 7

What scenarios can USDD be used for?

Accepted Answer

Official materials position USDD as a stablecoin that can be integrated with DeFi, listing use cases including trading, lending, staking, and liquidity-related activities. Holding USDD or transferring it into a protocol is only one prerequisite for entering that protocol; specific functions are determined by that protocol’s contracts and rules. For example, the risks and fund status involved in lending, providing liquidity, or staking are not determined uniformly by USDD itself, but also depend on the liquidation, exchange, reward, and exit mechanisms of the selected application.

Question 8

Which networks does USDD support?

Accepted Answer

The official features page lists that the new version of USDD supports multi-chain environments including TRON, Ethereum, and BNB Chain. Multi-chain support means that assets and related protocol functions can be deployed on different networks; it does not mean that asset paths can be ignored for direct interoperability between networks. Before transferring in, transferring out, or using USDD across networks, confirm the network supported by the recipient, the USDD version, and the cross-chain path being used. If the network or asset version does not match, tokens with the same name may still fail to arrive as expected or be recognized by the target application.

Question 9

Is holding USDD equivalent to holding equity in the project?

Accepted Answer

Holding USDD means holding a stablecoin token balance; it is not equivalent to holding shares in a company. Official descriptions of the new version of USDD describe a collateral-backed decentralized stablecoin and its protocol mechanisms, rather than a corporate equity instrument. Therefore, dividends, corporate voting rights, or other shareholder rights cannot be inferred merely from holding USDD. Protocol governance, treasury operations, and token ownership are arrangements at different levels, and specific rights are subject to the applicable protocol rules.

Question 10

How can you understand USDD’s on-chain mechanisms?

Accepted Answer

Official materials state that collateral supporting USDD and transaction records can be audited on the blockchain. On-chain auditability means users can verify relevant transfers, contract interactions, and asset status based on public on-chain records. However, “auditable” does not mean that viewing a balance alone is sufficient to fully assess all risks. When verifying, still confirm the network involved, the corresponding contract or protocol interface, transaction parameters, and whether the records being viewed correspond to the actual usage path of the new version of USDD.

Question 11

How is USDD governed?

Accepted Answer

Official materials describe the new version of USDD as having a community-driven governance model, in which protocol-related decisions can be participated in through decentralized proposals and on-chain voting. Governance provides a decision-making process for protocol parameters or development direction; it does not alter the basic token nature of each USDD transfer. Actual effects must distinguish proposals, voting, and execution: raising an issue does not mean that a rule has changed, and the implementation method and effective conditions after a vote passes remain subject to the relevant governance and protocol processes.

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