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Introducing USDJ Stablecoin on the TRON network!

2023/07/22 - 19:18


Introducing USDJ Stablecoin on the TRON network! TRON offers a wide range of assets, but many of them suffer from high volatility, making them less suitable for everyday use. However, with USDJ, things are about to change.

USDJ is a brand new digital currency created through decentralized smart contracts on the TRON network. The beauty of USDJ lies in its accessibility, as anyone can use TRX as collateral to generate this stablecoin. Once generated, USDJ freely circulates like any other cryptocurrency.

What sets USDJ apart is its pegging to the US dollar through Collateralized Debt Positions (CDPs), ensuring stability and trustworthiness. Additionally, USDJ features autonomous feedback mechanisms, further enhancing its reliability.

As a USD-pegged cryptocurrency, USDJ is fully backed by collateral assets, making it a secure and reliable choice. We firmly believe that USDJ will play a crucial role in the flourishing TRON DeFi ecosystem, providing stability and utility for all users.

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The USDJ Stablecoin system revolves around two core components

the USDJ mortgage lending system and the decentralized autonomous incentive mechanism, both integral parts of JUST. Let's delve into the details of each:

  1. USDJ Mortgage Lending System: The USDJ mortgage lending system operates through decentralized smart contracts on the TRON network. Users can pledge their TRX tokens as collateral to generate USDJ stablecoins. These stablecoins are pegged to the US dollar through Collateralized Debt Positions (CDPs). Once the collateral is locked in, users can freely circulate USDJ in the cryptocurrency market.

  2. Decentralized Autonomous Incentive Mechanism: The decentralized autonomous incentive mechanism is another crucial aspect of the USDJ Stablecoin system. It operates autonomously, providing incentives and rewards to users who actively participate in the network. This mechanism ensures the stability and liquidity of USDJ by encouraging users to take part in various activities within the system.

Together, these core components form the backbone of the USDJ Stablecoin system, creating a robust and reliable ecosystem for users to generate, trade, and benefit from USDJ stablecoins. The system's design aims to offer a secure and efficient solution for stablecoin generation, facilitating a seamless experience for all participants in the TRON network.

Using Collateralized Debt Positions (CDPs) is the key method for generating USDJ stablecoins. Here's a step-by-step guide on how to do it:

  1. Obtain Collateral Assets: To start the process, exchange your TRX tokens for PTRX, which is the accepted collateral asset within the system at the moment.

  2. Create CDPs and Deposit Collateral Assets: Next, initiate a transaction with JUST to create a CDP. Once the CDP is created, perform another transaction to deposit the PTRX collateral assets into the CDP. This action will generate USDJ stablecoins for you.

  3. Generate USDJ through CDPs: As the CDP holder, you can specify the desired amount of USDJ to be generated within the CDP. Simultaneously, an equivalent amount of debt will be created, and the collateral assets will be locked up until the debt is repaid.

  4. Redeem the Collateral: To redeem the collateral, you must repay the debt using USDJ and pay a stability fee in the form of the JUST platform token, JST. Once the debt and stability fee are settled, you can send a transaction to JUST and retrieve all your collateral assets.

In case the value of the collateral experiences a significant drop, posing a risk of being unable to cover the debt, the CDP liquidation mechanism will be triggered. This process involves auctioning the collateral to repay the debt. Any remaining value after repaying the debt and penalty fee will be kept in the CDP, available for withdrawal.

By following these steps, users can effectively generate USDJ stablecoins through Collateralized Debt Positions and actively participate in the USDJ Stablecoin system on the TRON network.

The Price Stability Mechanism is a critical aspect of the USDJ Stablecoin System, ensuring that the USDJ price remains pegged to the US dollar (1.0 USD). The USDJ Target Price serves two main purposes:

  1. Debt-to-Collateral Ratio Calculation: The Target Price is used to determine the debt-to-collateral ratio within the CDP (Collateralized Debt Position).

  2. Value Determination for Collateral Assets: The Target Price also determines the value of collateral assets that USDJ holders will receive during the Global Settlement process.

To maintain price stability, the system utilizes the Target Rate Feedback Mechanism (TRFM). This mechanism dynamically adjusts the Target Rate to respond to market fluctuations and ensure the stability of USDJ price. The TRFM mobilizes market forces to achieve this objective.

When the market experiences instability, and the USDJ price deviates from the Target Price, the Target Rate is adjusted. The TRFM incentivizes people to hold or lend USDJ depending on the value of the Target Rate. Holding USDJ becomes more attractive when the Target Rate is positive, while lending USDJ becomes more appealing when the Target Rate is negative.

By implementing this feedback mechanism, the USDJ Stablecoin System maintains the market price of USDJ around its Target Price. This reduces the volatility of USDJ and increases liquidity during demand shocks.

Here's how the mechanism works:

  1. USDJ Price Below Target Price: If the market price of USDJ falls below the Target Price, the Target Rate increases. Generating USDJ with CDPs becomes more expensive, and the higher Target Rate leads to greater capital gains for holding USDJ. This increased demand for USDJ drives up its market price, bringing it closer to the Target Price.

  2. USDJ Price Above Target Price: Conversely, if the market price of USDJ rises above the Target Price, the Target Rate decreases. This makes it cheaper to generate USDJ with CDPs. As a result, the supply of USDJ increases, leading to a downward pressure on its market price, pulling it back towards the Target Price.

In summary, the Target Rate Feedback Mechanism is an essential tool that helps the USDJ Stablecoin System maintain the stability of USDJ price by actively responding to market fluctuations and aligning the market price with the pegged Target Price of 1.0 USD.

The Global Settlement Mechanism is a crucial component of the USDJ Stablecoin System, designed to address extreme scenarios where the USDJ price deviates significantly from the US Dollar due to a system attack or malicious control, leading to intolerable risks within the system. In such cases, designated Global Settlers, who are chosen by JST token holders, can activate the Global Settlement Mechanism, which follows these steps:

  1. Activation of Global Settlement: Once Global Settlement is activated, certain actions within the system are restricted. Specifically, no new CDPs can be created or adjusted, and the Price Feed is frozen at a specific value to process all users' claims.

  2. Processing Global Settlement Claims: During this phase, Keepers within the JUST system step in to conduct decentralized auctions of the outstanding debt and collateral assets. This process ensures that corresponding claims from all USDJ and CDP holders are fairly handled.

  3. Collateral Redemption by Holders: After the Keepers have successfully processed all Global Settlement claims, each USDJ and CDP holder can submit a claim request on the JUST platform. These holders are then allowed to directly exchange their USDJ or CDPs for a fixed amount of TRX (TRON's native cryptocurrency) based on the Target Price of USDJ. It is important to note that there is no time limit for users to execute this exchange, meaning they can do so at their convenience.

The Global Settlement Mechanism acts as a safeguard for the USDJ Stablecoin System, ensuring that extreme price deviations do not lead to widespread risks or vulnerabilities. By initiating Global Settlement, the system can stabilize and rectify any issues that may arise, thereby safeguarding the integrity and stability of the USDJ stablecoin.

The USDJ Stablecoin System incorporates a comprehensive risk-management framework to effectively manage potential risks. The system's risk management is divided into various components, and JST token holders play a crucial role in regulating these risks through their voting power. Here are the key aspects of the risk-management system:

  1. Modification of Sensitivity Parameter: The system allows administrators to adjust the sensitivity of the Target Rate Feedback Mechanism (TRFM), which helps regulate the USDJ price based on market conditions.

  2. Modification of Target Rate: JST holders can change the Target Rate to align the USDJ price with the current Target Price. This can be achieved by setting the Sensitivity Parameter and Target Rate to zero.

  3. Choosing Trusted Oracles: The JUST platform relies on decentralized Oracles to obtain internal collateral prices and market prices of USDJ. JST holders can control the number of Oracle nodes and designate specific nodes as trusted Oracles. The system remains secure as long as over half of the Oracles function properly.

  4. Modification of Price Feed Sensitivity: Adjusting the Price Feed Sensitivity affects the system's internal prices to a certain extent.

  5. Choosing Global Setters: The Global Setter mechanism is essential to protect the platform from attacks on Oracles and governance processes. Global setters are chosen, and their number determines the activation of global settlement.

  6. Setting Risk-Control Parameters: To maintain USDJ price stability, the JUST system sets several parameters for risk control, all of which are subject to voting and determination by JST holders:

    a) Debt Ceiling: The maximum debt that can be created by CDPs. Once the debt ceiling is reached, new USDJ creation becomes impossible unless existing CDPs are closed.

    b) Liquidation Ratio: The collateral-to-debt ratio when a CDP is liquidated. A low liquidation ratio indicates low price volatility expectations, while a high ratio suggests higher volatility.

    c) Stability Fee: An additional fee charged on users when repaying debt after borrowing USDJ from CDPs. The stability fee is priced in USDJ and repaid only in JST, which is then burned, reducing the supply. It regulates borrowing incentives and controls supply-and-demand risks.

    d) Penalty Ratio: Determines the maximum amount of USDJ bought and destroyed in liquidation auctions. The remaining collateral assets are refunded to CDP holders before liquidation. The penalty ratio improves the liquidation mechanism's efficiency, and the penalty funds are used to buy and burn PTRX, benefiting the PTRX to TRX ratio.

JUST System Governance is primarily driven by JST holders who play a crucial role in the decision-making and modification of the system parameters. JST holders earn revenue from the stability fees of USDJ, and they are responsible for governing the JUST system by selecting valid proposals through voting.

Here's how the governance process works:

  1. Voting and Proposal Selection: Each JST holder has the right to vote and select a smart contract proposal among all the proposals that aim to modify system parameters. The proposal with the highest number of votes becomes a valid proposal and gains permission to modify the variables of the JUST internal system governance based on established logic.

  2. Types of Valid Proposal Contracts: a) Single Action Proposal Contracts: These proposals can only be executed after obtaining root access. Once executed, they immediately apply changes to the variables of internal system governance. After execution, the single action proposal contract is deleted and becomes invalid. This type of proposal is straightforward but less flexible and is generally used in the early stages of the system.

    b) Delegating Proposal Contracts: These proposals continuously utilize their root access through second-layer governance logic. The second-layer logic can be simple, like defining a protocol for holding weekly votes on updated risk parameters. It can also include more advanced logic, such as restrictions on governance actions within defined time periods or limiting permissions of third-layer Delegating Proposal Contracts.

  3. Proposal Initiation: Any TRON account can submit suggestions for improving the JUST system by deploying valid smart contracts. JST holders use their JST tokens to cast approval votes for one or multiple proposals they support. This ensures a fair and just governance process, and approved suggestions are safely deployed in the JUST system.

Successful community governance is expected to enable USDJ to fully leverage its advantages as a stablecoin and find extensive applications across the TRON network.

Resources: JUST Official Website: www.just.network Product Website: just.tronscan.org

Last words

In conclusion, the USDJ Stablecoin System on the TRON network offers a groundbreaking solution for creating a stable digital currency. USDJ is generated through Collateralized Debt Positions (CDPs), allowing users to pledge TRX as collateral to create USDJ, which is pegged to the US dollar. This stablecoin is expected to become an integral part of the TRON DeFi ecosystem, providing a reliable and usable asset for everyday transactions.

The system's core mechanisms, including the Target Rate Feedback Mechanism (TRFM) and Global Settlement Mechanism, work in tandem to maintain the stability of USDJ price even during market fluctuations. USDJ holders are incentivized to hold or lend USDJ based on the Target Price, ensuring that the market price of USDJ remains close to its peg.

Furthermore, the governance of the JUST system is placed in the hands of JST token holders, allowing for a fair and decentralized decision-making process. JST holders can vote on proposals to modify system parameters, ensuring the system remains adaptable and secure.

Overall, the USDJ Stablecoin System represents a significant advancement in the field of decentralized stablecoins, providing a reliable and viable solution for users seeking a stable digital asset. As the system evolves and community governance strengthens, USDJ is poised to find widespread use and adoption across the TRON network, enhancing the DeFi ecosystem and empowering users with greater financial flexibility and stability.

For more information, visit the JUST Official Website: www.just.network or explore the Product Website: just.tronscan.org.

Frequently Asked Questions (FAQs) about USDJ Stablecoin

What is USDJ Stablecoin?

USDJ is a stable digital currency generated through decentralized smart contracts on the TRON network. It is pegged to the US dollar through Collateralized Debt Positions (CDPs) and enters into free circulation like any other cryptocurrency.

How is USDJ generated?

USDJ is generated by depositing collateral assets, currently PTRX, into CDPs. Users can pledge TRX as collateral to create USDJ.

How does the Target Rate Feedback Mechanism (TRFM) work? The TRFM helps maintain the stability of USDJ price. If the market price of USDJ falls below the Target Price, the Target Rate will increase, making it more expensive to generate USDJ. Conversely, if the market price rises above the Target Price, the Target Rate will decrease.

What happens during Global Settlement?

During Global Settlement, CDP creation and adjustments are halted, and the Price Feed is frozen. Keepers in the JUST system will auction debt and collateral assets to process claims of all USDJ and CDP holders.

How does the USDJ governance system work? USDJ governance relies on JST token holders, who can vote on valid proposals to modify the system parameters. JST holders use their tokens to cast approval votes for the proposals they support.

Can anyone submit a proposal for the USDJ system?

Yes, any TRON account can submit suggestions for improving the USDJ system by deploying valid smart contracts. JST holders then vote to select the valid proposals.

What are the risk management components in the USDJ stablecoin system?

Risk management includes modifying the sensitivity parameter, setting the Target Rate, choosing trusted Oracles, modifying Price Feed Sensitivity, selecting global setters, and setting parameters for risk control like debt ceiling, liquidation ratio, stability fee, and penalty ratio.

How is the stability of USDJ ensured during market instability?

During market instability, the TRFM adjusts the Target Rate to incentivize users to hold or lend USDJ, which helps maintain the market price of USDJ around the Target Price.

Where can I find more information about USDJ?

For more information, you can visit the JUST Official Website: www.just.network or explore the Product Website: just.tronscan.org.

How will USDJ contribute to the TRON DeFi ecosystem?

USDJ is expected to become an integral part of the TRON DeFi ecosystem, providing a stable and reliable asset for everyday use and empowering users with greater financial flexibility and stability.


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