Truly Crypto 101
Published in

Truly Crypto 101

Security, Transparency, and Stability — Three Core Competencies That Mark TUSD off

Bridging the crypto and the physical worlds, stablecoins are of great significance in the industry.

Over the past years, the stablecoin sphere has broken up USDT’s monopoly to embrace diversity. Now, the market size of stablecoins has exceeded $180 billion, over ten times higher than the figure two to three years ago, making stablecoins the cornerstone of the crypto space.

In the present crypto market, there are stablecoins pegged to USD or other fiat currencies, such as USDT, USDC, and TUSD, stablecoins whose stability is secured through over-collateralization by locking ETH or other crypto assets, such as DAI, and algorithmic stablecoins backed by algorithms, such as UST.

So, what kind of stablecoins will have the last laugh?

(Source: CoinMarketCap)

Truly believes that only stablecoins that are transparent, secure, and stable can be widely adopted and prosper in the long term. This is when TUSD comes into play: secured and stabilized by various mechanisms, it is likely to be the one that will make it to the end in this highly competitive market. Now, Truly will walk you through TUSD’s mechanisms!

24H Live Attestations VS. Monthly Audit Reports

Most USD-backed stablecoins prove their transparency to the market by monthly audit reports, which is a rather inefficient approach. This is where TUSD stands out with its 24-hour live on-chain attestations.

(Source: Web X Lab)

Public sources reveal that with the support of Armanino and Chainlink, TUSD has become the world’s first stablecoin with 24-hour live on-chain attestations. Through the collaboration with Chainlink, an industry-leading decentralized oracle solution, and Armanino, a top 25 accounting firm in the United States, TUSD has introduced its Proof of Reserve & Supply reference contracts and live attestations to extend its unparalleled openness and transparency to on-chain environments.

To put it simply, Armanino audits data in real-time and generates individual reports that are reviewed manually to secure the data’s credibility and transparency. Based on that, Armanino makes that data available to the Chainlink oracle network via an API endpoint. If the account balance has changed beyond a predetermined deviation, the Chainlink network will broadcast an update to the reference contract on the blockchain where it can be easily read by smart contract. If the TUSD Proof of Reserve contract reports that the USD fiat reserves are insufficient to back the TUSD circulating supply, circuit breakers will be triggered to suspend transactions and protect users’ assets.

This mechanism is also praised by a community member of MakerDAO, who commented:

“TUSD is one of the fastest-growing assets on the Maker platform. We wish more projects had their Proof of Reserve feature. It’s a huge step towards increased trust and transparency, and makes risk assessment much easier.”

Regrettably, USDC and other stablecoin counterparts of TUSD rely solely on monthly-issued audit reports to prove their openness and transparency, making their credibility in question. On the other hand, algorithmic stablecoins that boast a higher level of decentralization are exposed to risks of losing the USD peg.

Security Enhanced by Third-Party Escrow

TUSD’s security is guaranteed in two ways, one through its reserve. As has been discussed, TUSD tokens are 100% backed by USD reserves and maintain a 1:1 ratio of the reserves to TUSD circulating supply. Other than that, the partnering banks and trust companies also endorse TUSD’s security.

What impresses Truly most is the secure, account-based custody services offered by TUSD. When a user buys TUSD, the operations team of TrustToken will have no access to the funds. This is achieved through TrueUSD’s partnerships with multiple regulated trust companies, which helps protect the TUSD funds in escrow to the maximum extent possible — few other stablecoins have managed to do so. The tamper-proof custody of the USD reserves speaks the TUSD team’s sincerity and dedication to asset security.

(Flow of minting and redeeming TUSD)

Overseas banks are commercial banks in nature and are therefore exposed to higher risks, which obliges traders to look for regulated banks that offer the best services. According to Truly’s research, on top of the trust companies that supervise the funds, the partnering banks of TUSD are also crypto-friendly and industry frontrunners.

TrustToken has partnered with five banks, including Signature Bank, Silvergate Bank, Prime Trust, First Digital Trust, and BitGo. Among them, Signature Bank is the first FDIC-insured bank to launch a blockchain-based digital payment platform, while Prime Trust is a regulated financial institution overseen by the banking commissioner’s office at the Nevada Financial Institutions Division with businesses spanning the digital economy, trusts, securities, and government affairs.

Other banks are also industry leaders that continue to offer TUSD users secure, efficient, and convenient financial services in their own ways.

24/7 Minting and Redemption Services as Fast as Two Minutes

How is TUSD kept stable? Since TUSD is always redeemable 1:1 with USD, it can be kept stable through the market mechanisms. Many institutional traders have already entered the game. They will buy TUSD once its price falls below 1 USD because they know they can always redeem it on the TrueUSD website at 1 USD. Conversely, they will buy TUSD from us once its price goes beyond 1 USD and then sell it on the exchange to make a profit until it returns to 1 USD.

As mentioned earlier, the Chainlink network can obtain real-time staking metrics, which guarantees 100% USD collateralization, a standard much more stringent than the one adopted by the modern banking system. TUSD also supports near-instant minting and redemption services through the Silvergate Exchange Network (SEN) and PrimeX technology by PrimeTrust. Users can enjoy direct-to-bank redemption through a memorable 5-character TUSD redemption address.

To be more specific, Prime Trust provides TUSD users with a fast and efficient minting vehicle via Prime X technology, where users can access 24/7 real-time minting/redemption services, along with the optimal settlement approaches. Silvergate Bank, on the other hand, creates an equally fast and efficient minting vehicle and 24/7 real-time minting/redemption services far superior to those in traditional banks’ portfolios. It brings users an exceptionally smooth real-time settlement service, boosting the efficiency of TUSD minting and redemption while keeping its value stable and reliable.

To wind it up

Algorithmic stablecoins also deserve some attention here. At the current stage, their security is still under the microscope. They are construed more as an instrument for arbitrage than as an equally trustworthy alternative to TUSD. Therefore, Truly believes that the liquidity underpinning the growth of the crypto world still comes from U.S. dollars, which it is pegged at.

With all these said, we can arrive at a bold prediction. In the following years or even the following decade, USD-pegged stablecoins are likely to retain their value for an extended period of time due to the supremacy of U.S. dollars. Against this backdrop, TrueUSD will stand out thanks to its supplier boasting sound auditing mechanisms, allowing it to meet the market demand by playing a better role in the crypto world.

To know more about TUSD you can visit us on:

tusd.io

Discord

Twitter

Truly

Telegram

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store