Tron DAO Reserve gives Wintermute the right to mint and burn USDD

Quick Take

  • Tron DAO Reserve (TDR), a group that governs the USDD stablecoin, has added Wintermute as its latest member.
  • Wintermute will act one of the nine whitelisted institutions in the DAO that can mint and redeem USDD.

Tron DAO Reserve (TDR), a group that governs the Decentralized USD (USDD) stablecoin, says it has signed up Wintermute as its latest member. 

Wintermute, one of the largest trading firms in crypto, will act as one of nine whitelisted institutions in the DAO that can mint and redeem USDD. The firm will also participate in other activities to help stabilize USDD's value, according to the media announcement. 

"The appointment authorizes Wintermute to mint and burn USDD as a collaborator with the Reserve. As a Member and Whitelisted Institution, Wintermute will advise the TDR and make recommendations to enhance, develop, and supply general aid for the USDD network," TDR said in a Tuesday announcement.

The USDD stablecoin features an algorithmic mint and burn mechanism. All of the supply of USDD is minted with $1 worth of its own sister token tron (TRX), the native cryptocurrency of the Tron blockchain. Per its design, when the USDD price falls below the $1 target, users can burn their USDD to mint TRX, which brings the USDD price back to the target level.

The caveat is that only certain parties have the exclusive right to swap between USDD and TRX. These parties are referred to as whitelisted institutions, with Wintermute being the latest. So far, no redemptions have yet been made.


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The firm will join eight other members of the Tron DAO, which are Alameda Research, Amber, Ankr, FalconX, Poloniex, Mirana, Multichain, and TPS Capital.

"There is a lot of exciting activity going on in the Tron ecosystem which we’re seeing in terms of total value locked (TVL) and projects being built and we’re excited to find ways to get involved and contribute," David Micley, business development director at Wintermute, said on the TDR membership.

Besides the mint and burn mechanism, the USDD stablecoin maintains the peg with centrally controlled reserves. This reserve is made of various tokens exceeding USDD’s total value and is held as collateral to backstop the stablecoin in case it faces a bank run. 

At the moment, USDD's market capitalization is slightly over $745 million, whereas the DAO holds about $2.3 billion in collateral reserves, with a 300% overcollateralization ratio. In the long run, TDR says it plans to raise $10 billion for its reserves.

© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

About Author

Vishal Chawla is The Block’s crypto ecosystems editor and has spent over six years covering tech protocols, cybersecurity, artificial intelligence and cloud computing. Vishal likes to delve deep into blockchain intricacies to ensure readers are well-informed about the continuously evolving crypto landscape. He is also a staunch advocate for rigorous security practices in the space. Before joining The Block, Vishal held positions at IDG ComputerWorld, CIO, and Crypto Briefing. He can be reached on Twitter at @vishal4c and via email at [email protected]