USD Tez » FAQ/Fact Sheet
Last updated: May 23rd, 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 fast, 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.
How do I mint USD Tez for myself or my institution?
Visit the minting page on the USDtz website for minting information.
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 value is USD Tez pegged?
As you may have guessed, USDtz token is priced to match the United States Dollar (USD). 1 USDtz token must meet the same value of 1 USD.
How does USD Tez maintain 1–1 stability?
USD Tez can always be redeemed for the FIAT of equivalent value. USDtz maintains full reserves.
What determines the exchange rate of USDtz/XTZ?
The rate of exchange for the pairing USDtz-to-XTZ is set by the free market. For the USDtz smart-contract to determine the fair-market price, it will use 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 1/10000th of one penny..
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 a non-shareholder foundation titled the Tezos Stablecoin Foundation (aka StableTez Foundation). The Tezos Stablecoin Foundation will oversee all off-chain 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 devolved permanently from the Tezos Stablecoin Foundation to the Tezos Stablecoin DAO (aka the StableTez DAO), enabling more consensus-driven innovations as well as the immortality of the stablecoin.
Other entities, 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 begins at a 1:1 collateralization, targeting a maximum growth cap of 4:1 over-collateralization with both FIAT and XTZ. That’s 2:1 FIAT and 2:1 XTZ.
How is USD Tez collateralization structured to fill to a 4:1 ratio?
A future quadruple backed USDtz Reserve is comprised of 2 layers; a base layer and a growth layer. Each layer has 2 silos. Each full silo by itself would collateralize USDtz 100%.
The Base Layer contains 1 FIAT USD silo and 1 XTZ silo. It all starts with the collateral purchased for the newly minted USDtz — that collateral goes to Silo 1. Right now USD Tez can minted with USDC as collateral. Silo 2 is XTZ — a completely Tezos on-chain source that is stakeable and programmable, and the actions for which are subject to formal verification on the blockchain.
The Growth Layer contains 2 silos as well (one of FIAT and one of XTZ). Although it may seem redundant, the purpose of this layer actually what keeps the Silo 2 (XTZ) of the Base Layer full. Although the FIAT silo of the Base Layer will always be full no matter what happens to the market, the price of XTZ is constantly fluctuating. The only way to keep Silo 2 shock resistant even in case of extreme market events is to have an additional 2 silos (one of each type).
Any growth beyond the growth layer’s capacity is surplus and moved to a 5th “Harvest” silo.
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?
TEZEX (Tezos Exchange) is set to launch soon after the launch of USDtz. TEZEX will enable on-chain trading as a much lower-cost alternative to the current exchange landscape, in a decentralized fashion, with scalable liquidity, and formal verification of trading records.
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?
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: