stUSDT Risk Assessment | Crypto Daily Digest Sep.25

TI Research

Tron's RWA project, stUSDT, has garnered more than $1.7 billion in total value locked (TVL). However, this project has sparked significant controversy within the crypto community. Is it truly secure?

In July 2023, the TRON introduced its Real World Asset (RWA) product, staked USDT (stUSDT), a receipt token for stablecoins invested into interest-earning RWAs such as short-term government bonds. stUSDT has offered rates consistent with other RWA tokens backed by U.S. Treasuries, ranging between 4–5%. The project has garnered significant TVL in a short period of time. However, it also sparked a lot of controversy.

Cryptoc Funds and Market Makers Express Concerns about Justin's stUSDT Position in HTX

Llama Risk recently gave a comprehensive analysis of stUSDT. The TLDR of its analysis is:

  • While the stUSDT website states that reserves target short-term government bonds, there is no mandate on the portfolio composition, reserves and custodians are not disclosed, and no third-party attestations are available.
  • There are uncertainties regarding the legal validity, transparency, and regulatory compliance regarding a custody agreement between RWA DAO and JustLend DAO, creating ambiguity around reserves management.
  • EOA accounts controlled by anonymous team members manage on-chain operations such as rate-limited rebasing, handling of user funds, and contract upgrades.
  • There are no published smart contract audits or a bug bounty program, and most system contracts have not been verified on Etherscan or Tronscan.

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