Learn more about the first of its kind, the TUSD Stablecoin. Love it or Hate it, it definitely bears weight in Crypto.
Introduction
Over the last few years, the crypto market has seen the rise of many different stablecoins, the first of which was USDT.
Though stablecoins proved themselves to be essential in the blockchain industry, the main problem has always been to guarantee the security and stability of the peg of these coins.
In this article, we aim to introduce TUSD (True USD), one of the most reliable stablecoins fully collateralized by USD.
TUSD is the first of a number of stablecoins, all tied to real assets, launched on March 8th, 2018 by TrustToken. The coin exists in its ERC20 version on Ethereum and BEP2 version (Binance Chain). TUSD is the first independently verified digital asset redeemable 1-for-1 for US dollars and supports over 100 trading partners amongst the biggest players in the crypto space.
TrustToken
TrustToken, based in San Francisco, California, was founded in 2017 by a team of big brains from Stanford, UC Berkeley, PwC, Google, and Palantir.
The core team is currently made of the following members:
CEO: Rafael Cosman
Sen. Director Finance & COO: Alex De Lorraine
Chairman of the Board: Tom Shields
Chief Technology Officer: Marek Kirejczyk
Chief Investment Officer: Bill Wolf
General Counsel: Diana Bushard
The team behind TrustToken is made of nearly 80 employees located in Europe, Asia, and North America:
Since 2017 the company has grown significantly by releasing a wide range of successful products in the crypto space:
TruFi: the core product of TrustToken, a lending protocol with stable returns in TUSD for lenders, an on-chain credit line for borrowers with no need for collateral. TrueFi is in an ongoing process of decentralization (TruFi DAO). Since November 2020 TrueFi has facilitated ~$1.5B of loan originations and more than $1B of repayments, with no defaults to date, with a mission to grow TruFi has the definitive protocol for the nearly $10 trillion global lending market.
TrueFx: A stablecoin basket built on the five TrueCurrencies launched by TrustToken, available on Balancer
Stablecoins: Five stablecoins fully collateralized to their currency counterpart: TUSD, TAUD, TGBP, TCAD and THKD
True USD Stablecoin
TUSD (True USD) is the first stablecoin launched in April 2018. It’s a fully collateralized, independently audited, redeemable 1:1 for U.S. Dollars and is currently one of the most transparent stablecoins in the crypto market.
The idea for TUSD came when doubts about whether USDT was fully backed and had reliable banking relationships arose, that’s why in mid-2018 TrustToken issued TUSD to address these problems and offer to the market the most reliable stablecoin ever created.
But how does it work?
TUSD functions through an Ethereum smart contract that enables a tokenized version of the U.S. Dollar to be issued or redeemed.
When a user buys TUSD through TrustToken, the smart contract generates and issues an equivalent amount of TUSD that gets sent to the User’s Ethereum wallet.
Users can exchange Dollars for TUSD directly with third-party escrow accounts, rather than forward the money through the TUSD network.
When a user redeems TUSD for USD the smart contract burns the TUSD provided by the user and credits the user account the equivalent amount of U.S. Dollars, removing permanently the user’s TUSD from the circulating supply.
What’s even better is that TrustToken doesn’t charge commissions when a user buys or redeems USDT for USD. So what’s in for TrustToken? Well, they basically generate revenues by collecting interests on the U.S. dollars held in the escrow accounts.
Why IS TUSD considered so reliable?
What makes TUSD so reliable are the mechanisms that ensure at any time that the token is fully collateralized by U.S. Dollars, though reducing the risk of depeg due to market bias.
Fully collateralization is guaranteed by the fact that the US Dollars backing the coin are held securely by licensed trust companies. Using multiple escrow accounts, token holders are provided with legal protection against misappropriation. TrustToken doesn’t have access to the escrow funds, making TUSD even more secure.
At present, TrueUSD collaborates with five trusted partner banks — Signature Bank, Silvergate Bank, Prime Trust, First Digital Trust, and BitGo.
But what makes TUSD even more reliable is that, besides monthly reports released by Escrow Partners (those who hold the funds), the TUSD token offers real-time attestation 24x7.
According to public information, TUSD has also become the first stablecoin with on-chain live attestations TUSD has launched its Proof of Reserve & Supply reference contracts and live attestations through collaboration with Chainlink and Armanino, the first one being an industry-leading decentralized oracle solution while the second being one of the top 25 accounting firms in the U.S.
These collaborations have exceptionally increased the reliability of TUSD compared to other stablecoins.
Right now TUSD is supported by major centralized lending platforms such as Nexo, Celsius, Dharma, Crypto.com, and many others.
As of August 2022, TUSD has ranked the fifth-largest USD-pegged stablecoin with a market cap of around $1.1 billion and over 400,000 holders, following USDT, USDC, BUSD, and DAI.
In the second half of 2019 has been released a BEP2 version of TUSD token on the Binance Chain, thus increasing the usage and circulation of this stablecoin.
Still, a lot has to come from TrustToken and TUSD. At the end of 2021 TrueUSD has announced the launch of an Incentive Plan called Fountain, inspired by the idea of an endless flow.
And no better name could have been chosen for this program since $ 1 Billion worth of TUSD and other assets will fuel this plan that will serve as an incubator to finance new projects in the DeFi space with the aim of stimulating the growth of the ecosystem.
This initiative shows once more how TUSD aims to become one of the most prominent players in the stablecoin and DeFi scenario in the years to come.
Conclusions
Let’s summarise the pros and cons of TUSD:
PROS
TUSD is fully licensed and regulated in US
TUSD is fully backed 1 for 1 to US Dollars
Funds that back the token are held by licensed trusted partners, TrustToken doesn’t have access to funds
TUSD provides real-time attestation
-Users can redeem at any time with zero fees
CONS
- Centralised: TUSD is a fully centralized stablecoin
No Anonymity: Users who want to access TUSD need to perform KYC and AML
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This article was written by Concavian Barolosan.