what_is.title

What Is USDJ (USDJ)?

The whitepaper outlines USDJ as a stablecoin that is pegged to the US dollar and backed by collateral assets. Decentralized smart contracts on the TRON network enable anyone to pledge TRX as collateral to generate USDJ. Collateralized Debt Positions (CDPs) help maintain the USD peg, while autonomous feedback mechanisms ensure stability. The goal is for USDJ to become a key component of the DeFi ecosystem on TRON. USDJ is one of the offerings in the JUST DeFi ecosystem, which includes JustStable and the JustLend DAO.

Who Are the Founders of USDJ?

USDJ is a product that's part of the JUST network ecosystem. The talented team behind it comes from companies like Alibaba, Tencent, and IBM and are part of the JUST Foundation.

How Does USDJ Work?

USDJ is part of the JUST network ecosystem. Generating USDJ involves depositing collateral assets into Collateralized Debt Positions (CDP). To start the process, users need to convert TRX to PTRX, and then create a CDP by sending a transaction to JUST. Next, they deposit the PTRX into the same CDP through another transaction. When a user sends a transaction to create USDJ, an equal amount of debt is generated, and the collateral assets are locked up until repayment. This means that the assets are not available for redemption. USDJ has a price stability mechanism in place as well. It is initially pegged 1-to-1 to the US dollar, and a Target Rate Feedback Mechanism (TRFM) is deployed during times of market instability to maintain its denomination.

What Makes USDJ Unique?

In case the USDJ price from Oracles diverges from the actual US Dollar rate, JST token holders can implement a global settlement mechanism to mitigate any potential risks or damages. This process involves three steps:

First, the global settlement mechanism activates, after which CDP holders are unable to create or modify their positions. Meanwhile, the price feed is kept at a fixed value to process all user claims accurately and promptly.

Second, Keepers in the JUST system utilize a price feed to auction off all debt and collateral assets in a decentralized manner, granting settlement for USDJ and CDP holders' claims.

Finally, all USDJ and CDP holders can file a claim petition on JUST to exchange their USDJ or CDPs for a fixed quantity of TRX, depending on the Target Price of USDJ. There is no set deadline for when users must take this step.

The USDJ stablecoin system has a comprehensive risk-management program. JST holders who are part of the JUST governance system fully control the key decisions to regulate risks in the entire ecosystem. These steps include modifying sensitivity parameters through the Target Rate Feedback Mechanism (TRFM), modifying the Target Rate, choosing trusted oracles, and other security mechanisms outlined in the official whitepaper.

How Is the USDJ Network Secured?

USDJ is a TRC-20 token that operates on the Tron blockchain, which is secured by a delegated-proof-of-stake (DPoS) consensus mechanism. This mechanism utilizes a network of 27 super representatives (SRs) to verify transactions and package them into blocks. These Super Representatives are democratically elected through an open election process, ensuring a fair and transparent governance system.