If USDD is "overcollaterized", why did it lose its peg?

[Baofeng]

Being richer and have more money in pocket are not helpful if he does not intend to save USDD and TRON. Do Kwon made a bad decision to choose one and leave another die and what he chose is simply a serious mistake. If he chose $LUNA, he should save it rather than kill both tokens. Terra Foundation Guard used their reserved to save UST and failed. In the end, they lost most of money and can not save anything.

Justin Sun from beginning of the USDD de-peg crisis chose a good way to handle it. Spend money and try to handle the crisis. At least now we can see USDD gradually reclaims its peg. It is supported by general market too. Personally I still feel unsafe with algorithm stable coin, not only USDD. We don't know how bad the market will be and company can not make over collaterization forever. It has limited capital in pocket.

Justin Sun better play his cards right for the good of the crypto/Blockchain industry. Otherwise, another collapse like Terra/LUNA will further diminish investors' confidence into cryptocurrencies as reliable, long-term investments. You can bet prices will further decline if something like that happened now. Last time I've checked, USDD's peg was restored so I guess Justin proved me wrong. Still, USDD is a risky algorithmic stablecoin so I'd proceed with caution just in case. With regulators paying close attention to crypto's latest developments, we might see investor protections further down the road. Who knows if USDD becomes the first algorithmic stablecoin to hold its peg for generations? Just my thoughts

Yes, the risk is still there, I agree, even if he was able to restore it, doesn't mean that will not collapse as what happen to Luna. An I'm not sure as well if they are really over overcollaterized. Maybe they have surplus of reserves, but can they stay that long specially in the worsening market conditions? Besides, I think Justin has lost the luster of being the "shill God" of crypto. Specially the public meltdown between him and CZ.

[Abiky]

Yes, the risk is still there, I agree, even if he was able to restore it, doesn't mean that will not collapse as what happen to Luna. An I'm not sure as well if they are really over overcollaterized. Maybe they have surplus of reserves, but can they stay that long specially in the worsening market conditions? Besides, I think Justin has lost the luster of being the "shill God" of crypto. Specially the public meltdown between him and CZ.

With how shady Justin Sun's actions are, I would steer clear from USDD as much as possible. The stablecoin is still driven by algorithms even though Justin Sun claims it to be "overcollaterized". This term may just be a marketing scheme to attract as much investors into the stablecoin itself. I can't imagine how big the market crash will be if USDD loses its peg for a long period of time. Investors will be so angry they'll probably ditch stablecoins altogether. Regulators need to weigh in on the industry to prevent another downfall of such magnitude.

With how bad things have turned out for algorithmic stablecoins, it seems to me that only truly collaterized stablecoins will survive. I'm fine with that as long as decentralized cryptocurrencies remain the leading force of the industry. Just my opinion

[RussianEnglishTranslation]

Yes, the risk is still there, I agree, even if he was able to restore it, doesn't mean that will not collapse as what happen to Luna. An I'm not sure as well if they are really over overcollaterized. Maybe they have surplus of reserves, but can they stay that long specially in the worsening market conditions? Besides, I think Justin has lost the luster of being the "shill God" of crypto. Specially the public meltdown between him and CZ.

With how shady Justin Sun's actions are, I would steer clear from USDD as much as possible. The stablecoin is still driven by algorithms even though Justin Sun claims it to be "overcollaterized". This term may just be a marketing scheme to attract as much investors into the stablecoin itself. I can't imagine how big the market crash will be if USDD loses its peg for a long period of time. Investors will be so angry they'll probably ditch stablecoins altogether. Regulators need to weigh in on the industry to prevent another downfall of such magnitude.

With how bad things have turned out for algorithmic stablecoins, it seems to me that only truly collaterized stablecoins will survive. I'm fine with that as long as decentralized cryptocurrencies remain the leading force of the industry. Just my opinion

I think that fully collateralized and regulated stablecoins will become the norm. I am unsure if crypto collateralized or non-collateralized or partial collateralized will be allowed. NEAR recently rolled out a partially collateralized stablecoin and ICP is launching a collateralized one. It will be interesting to see which model wins and how regulation plays out.