Tron, the Justin Sun-led blockchain that launched in 2018, is now the third-largest DeFi blockchain in terms of Total Locked Value (TVL).
According to DefiLlama, the Total Amount Blocked (TVL) across nine different Tron’y apps is currently $5.9 billion, up 44% from last month.
The only two chains ahead are BNB Chain and industry leader Ethereum. Binance Smart Chain TVL is $10.8 billion and Ethereum is home to over $93 billion.
Additionally, Tron is the only blockchain that has seen continuous growth across all major networks.
Ethereum, Polygon, Solana, Avalanche, BNB Chain, and Fantom are all down double digits over the past month.
What is driving Tron?
Tron’s bullish activity has been primarily fueled by the launch of its new algorithmic stablecoin, which promises double-digit returns, a scheme not dissimilar to the recently imploded stablecoin Terra.
Unlike Tether’s USDT or Circle’s USDC, USDD isn’t backed by anything and is driven by smart contract algorithms. The algorithm that governs the stablecoin’s dollar peg is an arbitrage trade between USDD and TRX, the Tron network’s native token.
Investors can exchange (and remove from the offer) 1 USDD for 1 USD in TRX at any time. If the USDD price falls below one dollar, investors can buy USDD at a discount and exchange it for TRX and recoup the difference by selling TRX tokens on the open market.
Notice anything familiar?
And like Terra, USDD also promises investors more than 20% annual returns on various Tron-based projects.
The USDD rate on JustLend, a Tron native lending platform, is currently at 23%. Elsewhere, on the SUN stablecoin platform, users can earn up to 64% by staking their USDD TRX liquidity token.
Given the high fees, many of these platforms have seen a surge in activity.
JustLend’s TVL has grown tremendously from $1.79 billion to $2.86 billion in less than a month, according to DefiLlama.
Other protocols on Tron, including JustStables, SunSwap, and Sun.io, also saw increases in TVL over the past month. TVL on JustStables is up 15%, TVL on SUNSwap is up 6.18% and TVL on Sun.io is up 140% over the same period.
It’s not nearly as big as Terra’s UST, but the USDD’s market cap is also growing rapidly.
Currently, USDD has a total supply of 601 million tokens with a market cap of just over $602 million. That figure is higher than the $90 million recorded on launch day on May 5, 2022, according to data from CoinMarketCap.