This week the Tron blockchain has become the third-largest network in terms of total value locked (TVL) in decentralized finance (defi) protocols. Interestingly, 48.19% of the TVL is held by the defi protocol Justlend, an application that’s similar to Anchor Protocol as it offers more than 20% APY for USDD deposits. Amid Tron’s TVL rising, the network’s stablecoin USDD has been confronted by skeptics over the similarities USDD holds with Terra’s UST.
Tron ranks third in terms of total value locked in decentralized finance protocols
On May 30, 2022, Tron succeeded in becoming the third largest defi blockchain by total value locked. At the time of writing, the TVL of Tron in challenge is $5.94 billion, which is just below the TVL of Binance Smart Chain (BSC) and above the TVL of Avalanche (AVAX).
Amid the Terra LUNA and UST fallout, on May 12, 2022, Tron’s TVL was $3.97 billion and the blockchain was ranked number five in terms of TVL size by chains. On that day, Tron’s TVL was down 16.16% lower than it was on May 5, but after the Terra fiasco subsided, Tron claimed the third position in terms of TVL in defi.
This month, Tron’s TVL challenge has increased by 45.22% and in the last seven days since it has increased by 13.73%. Tron’s TVL is dominated by a defi protocol called Justlend, as 48.19% of Tron’s aggregate held in defi is hosted on the Justlend app. Justlend has a total locked value of $2.86 billion and it has increased a lot since May 21.
$1.08 billion was added to Justlend since May 21, as the protocol’s TVL increased by 58% since then. Furthermore, Justlend was audited by the blockchain security company Certik. Similar to Anchor, USDD deposits on Justlend offer 23.55% APY at the time of writing.
Other notable challenge apps on Tron, in terms of TVL balances, include Juststables and Sunswap. Juststables has a TVL balance of $1.41 billion and Sunswap has just under a billion in total value locked. USDD has also managed to become the ninth largest stablecoin among all existing fiat tokens.
The Tron stablecoin’s market valuation today is $603 million and it has seen $179.6 million in 24-hour global trade volume. Statistics from Cryptocompare indicate that USDT and USDC are USDD’s top two trading pairs. Tron’s new algorithmic stablecoin USDD and the APY on Justlend is arguably eerily similar to the products once offered by Do Kwon, Terraform Labs (TFL), and Anchor team.
Tron’s USDD Stablecoin Faces Many Critics and Skeptics
A number of critics have said “USDD is doomed”, and there is a litany of criticism about the project being so similar to UST. Data scientist Bennett Tomlin went so far as to say that USDD is not an algorithmic concept of fiat tokens.
“As far as I can tell USDD is not an algorithmic stablecoin,” Tomlin said. “The only interaction that the TRD members can do is to burn TRX to get USDD. I see no contract to go the other way, and no algorithm adjusting either mechanism, except that minting depends on oracle price of TRX.” Tomlin added:
As nominally, Terra’s algorithm was the mechanism that filled in the AMM in the market module (they lied about that). It doesn’t seem to have any algorithm at all.
Despite the criticism and speculation, Tron has managed to be a top contender in the world of decentralized finance. Furthermore, Tron’s native token tron (TRX) has managed to climb to the 14th position in terms of the largest market caps in the crypto economy.
Indeed, while Bitcoin (BTC), Ethereum (ETH) and many others posted weekly losses for nine consecutive weeks, Tron managed to avoid most of the market carnage. The TRX has risen 14.7% over the past two weeks and 30.5% against the US dollar over the past month.
