On our journey to decentralize peer-to-peer commerce we have been excited to support the efforts of other projects in the space working hard to solve important problems. We intend to support all ERC-20-compatible stablecoins and are excited to announce our recent partnership with TrustToken (the creators of TrueUSD) and our plan to support TrueUSD on Origin-powered marketplaces.
The TrueUSD stablecoin, which is backed 1-for-1 with US Dollars and transparently verified by third-party attestations, is the first asset token built on TrustToken, a platform for creating asset-backed tokens that is backed by A16Z Crypto as well as some investors common to Origin, BlockTower and Foundation Capital.
The Unstable Landscape Of Stablecoins
Stablecoins come in many forms. Some use an asset-backed approach and are pegged to a fiat currency like the US Dollar or even another cryptocurrency like ETH. Others take an algorithmic approach to keep the price of their stablecoin as close to a specific peg as possible. For a full breakdown of the state of stablecoins, check out this thorough research paper by one of Origin’s investors, Blockchain:
There is no clear winner this early in such a nascent space, but a couple stablecoins have certainly stuck out recently as clear leaders based on sheer volume.
Tether took the fiat-backed approach and pegged its USDT stablecoin to $1 Dollar, and despite controversy around its solvency and recently losing its peg, has been the clear leader in the stablecoin market by volume for some time.
The clear #2 in the space by volume is TrueUSD, which has gained considerable market share over the last several months and is leading a second wave of stablecoins focused on regulation. The main differentiator for TrueUSD is that they are fighting centralization by attempting to remove single points of failure. The dollars that back TrueUSD are currently split across two banks and not controlled by any one entity. The company is prevented from legally withdrawing or accessing these funds — or printing more TrueUSD — by two trust partners, and over time both the number of banks and the number of trust partners will increase, removing more and more counterparty risk along the way.
Mass adoption of blockchain-powered applications continues to be an uphill battle for many high-level reasons like scaling and user experience, and we are excited about all of the ambitious teams working to solve these known issues. At Origin, however, there are solvable problems standing between us and a future of truly peer-to-peer commerce. One of these problems, cryptocurrency price volatility, has a significant negative effect on listings on the Origin DApp, but we are optimistic that stablecoins will mitigate a lot of the risk inherent to these transactions. We look forward to supporting TrueUSD and many other stablecoins on Origin as we continue to enable the decentralized marketplaces of tomorrow.
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