USDD 2.0 from Messari's Perspective: Successful Practices of Over-Collateralization and Multi-Chain Strategy

Author: Messari

On September 26, the globally renowned crypto data research institution Messari released an in-depth report titled "USDD 2.0 - New Horizons," which comprehensively analyzes the latest developments and strategic layout of the decentralized stablecoin USDD. The report points out that USDD has achieved multi-chain ecosystem expansion through native deployment on Ethereum, and through innovative designs such as an over-collateralization mechanism, a Peg Stability Module (PSM), and a Smart Allocator, it is gradually building a self-sufficient and sustainably growing on-chain financial system.

According to Messari's analysis, since its relaunch in January 2025, the USDD 2.0 protocol has shown a robust development trend. As of early September 2025, the total value of its reserve collateral has peaked at over $620 million, consistently remaining above the circulating supply of USDD, strictly maintaining an over-collateralized state, which fully demonstrates USDD's strong risk resistance capability and long-term value potential.

In the report, Messari particularly commended the native deployment of USDD on Ethereum, noting that this move has enabled USDD to achieve a strategic leap in the "TRON-Ethereum" dual-chain architecture. The deep liquidity and wide application scenarios of the Ethereum ecosystem provide a solid foundation for the further development of USDD. Data from the report shows that the value of USDD's reserve collateral increased by 5% quarter-on-quarter in the third quarter, surpassing the 3% growth rate of stablecoin supply, indicating that USDD's collateralization rate is continuously strengthening during the transition to multi-chain deployment.

The Peg Stability Module (PSM), as the core mechanism for maintaining USDD's price stability, received significant commentary from Messari. This module supports users in exchanging USDT/USDC for Ethereum USDD at a 1:1 ratio, effectively maintaining the peg through an arbitrage mechanism. Messari emphasized that the arbitrage mechanism of PSM has established a solid price anchor for USDD, keeping it around $1 in the secondary market, thereby strongly ensuring liquidity and user confidence.

Data from the past two quarters further confirms the core role of PSM: as of September 8, 2025 (despite the third quarter not yet being over), the total amount of USDT/USDC exchanged for USDD has increased from $1.15 billion in the second quarter to $2.5 billion, a quarter-on-quarter growth of 117%; during the same period, the redemption amount rose from $1.24 billion to $2.7 billion, a quarter-on-quarter increase of 119%. This indicates that PSM is currently capable of effectively responding to large-scale demand fluctuations and maintaining USDD at the pegged price through the arbitrage mechanism.

Messari also delved into the innovative value of the Smart Allocator. This mechanism generates real returns by directing reserve funds into low-risk DeFi protocols and continuously reinvesting profits back into the system. Messari believes that this model will drive USDD from subsidy-driven growth to self-sustaining, establishing a long-term stable economic engine.

Additionally, the new contracts for USDD on Ethereum have undergone comprehensive audits by the renowned blockchain security firm CertiK, providing security assurance for its large-scale application. Messari concluded that through multi-chain strategies and capital efficiency optimization, USDD has not only strengthened its own stability but also injected new foundational financial tools into the DeFi ecosystem.