USD Tez — FAQ (and Fact Sheet)
Frequently asked questions about USD Tez and Official Facts
Last updated: January 31st, 2020.
What is USD Tez?
USD Tez (Symbol USDtz ) is a Tezos on-chain stablecoin pegged to the value of the United States Dollar and built to Tezos FA/TZIP digital asset token standard. Being on-chain and written in pure-Michelson, USDtz is quick, gas-efficient, and. programmable, Its computational outputs are subject to Tezos’ natural advantages of formal verification — ideal for continuous auditing, and super-precise on-chain trades.
What are the underlying values of the USD Tez project?
- On-chain liquidity is one of the most critical resources needed to enable a decentralized finance future.
- Tezos is the ideal platform for decentralized finance (DeFi), beyond any other blockchain protocol (past, present, or even those in planning) and will logically triumph as central to the future of DeFi.
To what is USD Tez-pegged?
Each USDtz token is priced to match the United States Dollar. 1 USDtz token must meet the same value of 1 USD.
What determines the exchange rate of USDtz/XTZ?
The rate of exchange for the pairing USDtz-to-XTZ is set by price oracles which by median consensus determine the true exchange rate between XTZ and the US Dollar; a system of price indicators deriving real-world market data to algorithmically determine the precise fair-price of XTZ in terms of USD up to 1/100000th of one penny ($0.0000001).
Are there stability fees or equivalent in USD Tez?
No. USD Tez is full-backed, so it can always be redeemed for its equivalent USD value. Therefore, unlike many other stablecoins — which rely on a synthetic system of intentional volatility within an internal marketplace to maintain its peg—the market can rest assured that USD Tez will always be redeemable for USD.
There are no stability fees to owning FIAT, and there shouldn’t be any stability fees to own a stablecoin. There are no stability fees for USD Tez.
How is USD Tez governed?
Initially, USD Tez will be administered by the USD Tez Foundation which will be based in Switzerland. The USD Tez Foundation will oversee all administrative activities of the stablecoin as well as steward the creation of what will ultimately a DAO (Decentralized Autonomous Organization ) in which governance decisions regarding USD Tez will be made on-chain by the consensus of USD Tez community members, just as Tezos itself embraces through on-chain governance.
Over time an increasing number of USD Tez governance jurisdictions will be revolved permanently from the USD Tez Foundation to the USD Tez DAO, enabling more consensus-driven innovations as well as the immortality of the stablecoin.
Other entities, such as Wealthchain, Inc. are service providers to the USD Tez Foundation and do not have any jurisdiction outside of those services agreements.
Does USD Tez keep full-reserves?
Yes. USD Tez will begin with a full-collateral reserve that can always be redeemed in full for USDtz tokens 1–1. In fact, USD Tez is targetting a 4:1 over-collateralized reserve; 2:1 over-collateralization with FIAT and 2:1 over-collateralization with USD.
The first layer is the base layer, containing 1 FIAT USD silo and 1 XTZ silo. All USDtz in existence will be fully redeemable for the equivalent value in either denomination.
The other two silos comprise the “growth layer” (which effectively collateralizes the base layer and enables growth activities). For example, if the price of XTZ goes down, the growth layer’s FIAT silo can ‘top-off’ the base layer’s XTZ silo with an XTZ purchase.
4:1 is the maximum collateralization. Any other growth of the collateral reserve else is surplus and moved to a 5th “Harvest” silo for distribution as ecosystem grants, as well as for dividend distribution to stakeholders.
How can I learn more about the USD Tez Reserve model?
Read the USD Tez Collateral-squared article.
What else can I do with USD Tez?
USD Tez can be used for On-Chain Lending — the on-chain lending concept will be integrated into a lending platform called Tezos Finance (aka ‘’TezFin’ Tezos.finance) which will launch in 2020 as well.
USD Tez can also be used to purchase TZ-bills which are similar to T-bills in purpose but on-chain issued through Tezos blockchain-enforced smart-contracts. TZ-bills will be issued and auctioned at Tezos.bond, which will serve as the primary portal for updates and information on TZ-bills and other bond types to come.
Will other stablecoins be issued by the project behind USD Tez?
The US-dollar and Bitcoin are the two most critical liquidity instruments in XTZ-trading. ETHtz and LTCtz are in the works as well. Though, not all of the stable-coins to be issued by StableTez are necessarily for liquidity purposes.
How can I continue to follow the project?
Go to USDtz.com to sign up for the USD Tez mailing list. You can also follow us on various social media channels, including: