Interview with Justin Sun: Web3 Yu’ebao stUSDT, Tron’s Ambition to Connect DeFi and TradFiInterview with Justin Sun: Tron's Web3 Yu'ebao stUSDT and Ambition to Connect DeFi and TradFi # Introduction Justin Sun, Tron's founder, recently discussed the Web3 Yu'ebao stUSDT platform and Tron's aim to connect decentralized finance (DeFi) and traditional finance (TradFi) industries. ## Web3 Yu'ebao stUSDT Web3 Yu'ebao stUSDT is a Tron-decentralized finance platform that allows users to earn interest on their stUSDT holdings, which are backed by real US dollars held in a BitGo Trust account. The platform's high-interest rates, currently around 20% per year, have attracted over $5 billion worth of stUSDT. ## Connecting DeFi and TradFi Sun believes Tron is key to integrating DeFi and TradFi. With its high transaction speeds and low fees, Tron has partnered with major financial institutions like BitGo and launched platforms like Web3 Yu'ebao stUSDT. Sun sees Tron leading the global financial industry, revolutionizing the way people invest and save money. # Conclusion The development of Web3 Yu'ebao stUSDT and Tron's plan to connect DeFi and TradFi represent significant steps in the financial industry's evolution. With Sun's ambitious plans for Tron, let's see how the platform develops and disrupts the traditional financial landscape.
stUSDT allows users to obtain low-risk and stable investment opportunities in US Treasury bonds, and supports flexible withdrawals. Its DeFi composability will also play an important role as a cornerstone of DeFi in the TRON ecosystem, further unleashing the financialization capabilities of real-world financial assets.
Interviewee: Justin Sun, founder of TRON and member of the Huobi Global Advisory Committee
Interviewer & Author: Karen, Foresight News
RWA (Real World Asset) tokenization is considered a bridge between DeFi and the trillion-dollar TradFi. It not only eliminates barriers to entry into traditional financial markets, providing fair investment and access opportunities, but also further unleashes the liquidity and financial power of traditional assets. Therefore, it has been highly anticipated.
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On the one hand, more and more traditional financial giants such as JPMorgan Chase, Goldman Sachs, Citigroup, and BlackRock are beginning to enter the RWA tokenization narrative. For example:
JPMorgan Chase believes that tokenization is a killer application for traditional finance and has launched the blockchain enterprise platform Onyx Digital Assets aimed at tokenizing traditional assets and releasing liquidity since 2020;
Goldman Sachs entered the RWA through the tokenization platform GS DAP. In February of this year, the Hong Kong SAR government announced the successful issuance of HKD 800 million of government green bonds using the Goldman Sachs tokenization platform GS DAP;
BlackRock is already exploring the tokenization of stocks and bonds.
On the other hand, since last year, top projects, institutions, exchanges, and other market participants in the cryptocurrency industry such as Terra, Three Arrows Capital, FTX, Celsius, etc. have successively experienced explosions, causing market participants to begin to seek more conservative and attractive investment targets.
Government bonds, especially US Treasury bonds, have become one of the safest investment havens. And because the tokenization of US Treasury bonds can further unleash the financial power of US Treasury bonds, it is quite attractive to participants in the cryptocurrency industry and traditional financial markets (especially those with large amounts of funds).
Against this backdrop, the TRON ecosystem has also begun to explore the value of RWA raceway. On the evening of July 3rd, the TRON ecosystem officially launched the stUSDT stable pledge product for RWA, positioning it as a “Web3 version of Yu’ebao” and allowing users to pledge USDT to obtain RWA rewards. The pledge certificate stUSDT will also become an important building block in the DeFi Lego world built in the TRON ecosystem. In less than half a day after its launch, the lock-up amount of stUSDT has reached 22 million USDT.
In response to this, Foresight News interviewed Sun Yuchen on the occasion of the launch of stUSDT, and Sun Yuchen revealed his views on the RWA raceway and the advantages of stUSDT and the expectations of empowering the TRON ecosystem.
What is stUSDT? Who launched it?
When interviewed by Foresight News, Sun Yuchen said, “One important reason for the warming of the RWA narrative is that it can bring traditional fixed-income products such as bonds to the crypto field and fill the gap in the lack of fixed-income products in the crypto field for traditional financial markets. The original intention of launching stUSDT is not only this, but also to regard it as the balance treasure of the blockchain field, providing stable income for users.”
According to the stUSDT official website, stUSDT partners include TRON, TRONLink, JustLend, BitTorrent, JUST, Tether, WINkLink, SUN and other projects, most of which are native projects of the TRON ecosystem.
About the background of stUSDT, RWA DAO is a decentralized autonomous community dedicated to RWA investment through the TRON network, including RWA investment advisory committee, RWA arranger, asset manager and RWA treasury management contract and other roles, among which the investment advisory committee is elected by RWA DAO, responsible for supervising the daily investment and operation of RWA DAO, and monitoring investment risks and timely suppressing potential risk impacts.
RWA DAO also manages RWA-related smart contracts to ensure their stability, transparency, and efficiency. At present, RWA DAO entrusts JustLend DAO for governance, and will also use 10% of the income to repurchase JST tokens, and combine them with stable coins to form corresponding stable coin pools. When asked if there is a plan to issue coins after stUSDT, Sun Yuchen said that stUSDT is actually empowering JustLend, and the main focus is still on JST.
Regarding the platform’s operation, stUSDT allows users to earn RWA rewards by pledging USDT. The stUSDT certificate obtained from the pledge can not only circulate freely on the chain, but can also be withdrawn at any time.
When pledging USDT, USDT can be minted into stUSDT pledge certificate at a 1:1 ratio. The stUSDT-RWA smart contract will distribute rewards to holders through the Rebase mechanism.
Rebase refers to resetting the price of stUSDT to 1 at a fixed time every day, and then increasing the corresponding balance according to the user’s earnings. The exchange rate between stUSDT and USDT will always remain at 1:1. For the convenience of users, stUSDT will disclose the investment and Rebase announcements daily.
Why is stUSDT the Yu’EBao of the Web3 world?
Sun Yuchen told Foresight News that “when designing stUSDT, we referred to the tokenization of RWA and the idea of Lido stETH, which is very flexible and simple. Users only need to “deposit” and “withdraw”, and let the decentralized smart contract handle the rest, which is similar to Yu’EBao. “
Currently, most similar products on the market are set up in the form of permits or whitelists, which not only have access limitations, but also have great restrictions on trading, liquidity release, and DeFi composability.
Compared with most similar products, stUSDT has the advantages of no permission required, flexible access, withdrawable at any time, and DeFi composability. It allows any USDT holder to participate in RWA investment and will support other stablecoins in the future. It will also be developed on multiple chains such as Ethereum.
As for the platform fees that users are concerned about, Ondo Finance charges a management fee of 0.15%/year, and Matrixport’s Matrixdock charges a 0.1% APY service fee rate and a 0.1% redemption fee rate. In comparison, stUSDT does not charge pledge fees, only a 0.1% redemption fee.
In addition, since stUSDT refers to the design concept of Lido stETH, stUSDT is also a packaged TRC-20 token, which will further enhance the composability of stUSDT, bring financial Lego attributes to TRON users, and release the infinite possibilities of assets.
As Sun Yuchen said, “stUSDT is highly versatile, it can exist in various DeFi lending, yield, and contract protocols, as well as be listed on exchanges for trading. stUSDT will become an anchor for the basic income of the 50 billion US dollars of assets on the entire TRON chain in the future, which is also very important for the entire DeFi Lego.” Currently, Huobi and Poloniex have announced their support for stUSDT pledging products.
How will stUSDT empower the TRON ecosystem?
Regarding how stUSDT will empower the TRON ecosystem, Sun Yuchen pointed out that “stUSDT can bridge the gap between the blockchain world and the real world, allowing everyone to enjoy RWA’s investment channels, giving 8 billion people worldwide a financial freedom investment opportunity.”
First of all, the TRON network is currently the main circulation market for stablecoins, with nearly 50 billion US dollars, accounting for 60% of the stablecoin share. If all stablecoins are invested in RWA, it is equivalent to generating US$2.5 billion in interest income for users every year.
Secondly, stUSDT will not only become a basic anchor fixed-rate product in the entire TRON network but also an important cornerstone in the DeFi puzzle.
Sun Yuchen explained that the concept of anchored interest rates is currently lacking in both the TRON network and the entire Ethereum network. In the future, stUSDT will bring anchored interest rates to the blockchain world.
What guarantees and prevention mechanisms does stUSDT have in extreme cases?
It is not difficult to launch an investment product. The difficulty lies in making it flourish and having risk prevention mechanisms.
Regarding stUSDT’s risk response mechanism, Sun Yuchen explained stUSDT’s safety from the perspective of investment targets, product design, and other aspects:
1. The funds deposited by users in the stUSDT product are invested in high-rated and low-risk government bonds, and the safety of government bonds is absolutely high. For US bonds, new bonds can always be issued to repay old bonds, so there is almost no possibility of default for US bonds.
2. Like Lido stETH, stUSDT provides a queue of uninvested funds to ensure short-term deposits and withdrawals. On the one hand, people are queuing up to deposit, and on the other hand, people are queuing up to withdraw. In addition, if 90% of the funds in stUSDT are invested in government bonds, the remaining 10% will be directly deposited into the stUSDT contract, allowing users to withdraw at any time.
3. Exiting stUSDT is also diverse. Users can not only redeem it directly, but also trade it on stablecoin pools on DEXs such as SunSwap, without waiting for the expiration date.
Overall, stUSDT allows users to access low-risk and stable US Treasury investment opportunities, and supports flexible withdrawals. The DeFi composability of stUSDT will play an important role as a cornerstone of DeFi in the TRON ecosystem, and may further unleash the financialization potential of real-world financial assets and push the TRON ecosystem forward. Of course, there are still many uncertainties and challenges in the RWA market, and there is currently no clear regulatory policy for RWA tokenization.
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