USDD misleading collateral

TRON is intentionally misleading investors into thinking that their algorithm stablecoin is more safe than UST.

As of 6 June 2022, there is 667,521,101 USDD in circulation which TRON claims is overcollateralized at 220%, meaning that there is USD 1,473 mil of collateral.
Source: https://tdr.org/#/

Let us take a look at the breakdown of this "reserve".

13,040.6 BTC (USD 406.7 mil)

240,000,000 USDT (USD 240mil)

1,906,000,176 TRX (USD 158.5 mil)

8,297,232,883 TRX (USD 667.5 mil) burnt to mint 667.5 mil of USDD

Basically, TRON is including the TRX burnt as collateral for USDD. This is equivalent to saying that on 7 May, UST was overcollateralized at 117% (3b of bitcoin and 18b of Luna). Look at how well 117% collateralized worked out. If you look at the Tron website, they classify themselves as the highest collateralized stablecoin against DAI, USDT, TUSD and USDC. The difference is that those stablecoins are backed by other assets that are not linked to the stablecoin itself.

In the event of a death spiral, TRX will not have any value. If we exclude TRX from the computation of reserves and assume that TRX hits zero value, USDD is only backed by USD 646.7mil (90% collateralized) and this assumes that the value of BTC does not fall.

Lastly, TRON released a statement that a minimum of 130% collateral ratio will be maintained. They did not state that the reserves will be in BTC or other stablecoins. They could remove BTC/USDT while increasing TRX holdings in their reserves and still meet their 130% collateral ratio. The only issue is that it will be 100% backed by TRX, the coin that will have no value if a death spiral occurs.
Source: https://www.ndtv.com/business/tron-modifies-usdd-stablecoin-to-avoid-terrausd-style-collapse-3040217