Interpretation of USDD and Smart Allocator｜The Most Transparent Stablecoin Strategy

1/ Will Smart Allocator affect the liquidity of PSM?

There will be no impact. I found a picture for everyone to take a look at. The first picture is the liquidity of USDD exchanged for USDT in the PSM two days ago, and the second picture is now, where you can clearly see the changes in the graph.

The reason is that the PSM liquidity will be flexibly adjusted based on the TVL of USDD and real-time conditions, so there is no need to worry about this. Therefore, there is no issue with the price of USDD, including the fact that since its inception, USDD has never experienced a price deviation of more than 6 hours.

2/ Does Smart Allocator pose any risks for USDD users?

No risk at all. This is because the Smart Allocator protocol clearly states that the user's principal will not be affected in any way; in the event of systemic risk, the losses will be borne by the protocol.

The reason is that USDD's Smart Allocator is a completely transparent on-chain high liquidity low-risk strategy, ensuring safety is the top priority. Compared to stablecoins in the same category, USDD's strategy is the safest and has the highest transparency, and the on-chain reserve fund allocation can be viewed anytime on the official website.

3/ What impact does Smart Allocator have on USDD users?

No impact at all. In fact, it is very normal and common for a stablecoin to have its own strategy, and many stablecoin strategies are not public, making it impossible for users to trace the real-time dynamics of the reserves.

However, the strategy of USDD is in fact fully open and transparent on the chain and on the official website. In line with the principle of 100% transparency for users, the direction, amount, and addresses of the funds are fully disclosed and can be queried at any time. Therefore, there is actually no impact; it can only be said that it is more transparent.

In fact, USDD can achieve similar things without having to launch this section; even the PSM liquidity on the official website does not need to be tracked in real-time, as it is 1:1. It only needs to ensure exchange liquidity. Doing all this is entirely to provide users with a more transparent, secure, and reassuring experience. This also highlights USDD's commitment to the safety of user assets and oversight.