In all the huff and shuffle surrounding the several recent stablecoin offerings, even the most dutiful reader might have overlooked TrueUSD (TUSD). However, December has turned out to be an eventful month for the stablecoin, as they today announced that they are the first which has successfully passed three separate security audits.
This means that as far as any expert can surmise, their smart contract does not contain any bugs or injection opportunities which might, for instance, enable the creation of new units. The audits were performed by security firms Certik, SlowMist, and Zeppelin.
CCN had the pleasure of speaking to TrueUSD Co-Founder Tory Reiss on a variety of subjects, most importantly the subject of TrueUSD’s partnership with Nexo, a company which lends cryptonaughts money based on their cryptoassets.
Even the most diehard crypto believer might find it necessary from time to time to generate fiat cash for real-life purposes. Medical emergencies, natural disasters, tax time – life happens. Nexo allows a user to lock up blockchain assets and receive a loan based on their value at the time. Various assets have various lending rates, as Reiss explained:
Nexo essentially allows you to lock up your crypto and then get cash out without selling it, because you’re basically just taking a loan against your crypto balance. So there’s no taxable event. With things like Bitcoin, because they’re so volatile, they make you collateralize it a lot. But what’s really cool is in our partnership with them, we negotiated a pretty unique agreement, where they’ll loan you almost 95% of the value of the TrueUSD that you lock up. You can then pull that cash out instantly, use it for whatever you want – pay bills, buy something, and then you pay back the loan and you get your TrueUSD back.
For their part, Nexo is happy to lend to stablecoin holders based on their holdings. As Reiss told us, they charge a lot less on such loans because the assets have far less volatility by design. Antoni Trenchev, a Managing Partner at Nexo, said in a press release:
At Nexo we know how essential trust is for our instant crypto loan model and for the blockchain space in general. That is why we are happy to work closely with TrustToken, the company underpinning TrueUSD. Their model of regular verification of escrowed balances and the legal protection against embezzlement of the underlying USD will set the tone for the entire stablecoins industry. TrueUSD as a withdrawal or repayment option is much appreciated by Nexo’s clients and stablecoins will continue to play a crucial role because they bear the all welcomed characteristics of crypto, minus the volatility.
One important thing prospective users should note is that the minimum loan amount on Nexo is $1,000. The minimum redemption amount through the TrueUSD platform itself is $10,000. This means that a savvy trader who is just starting out now has another option for liquidating just a small portion of his or her TUSD holdings.
Nexo is currently working on automating the process of allowing users to participate as liquidity providers through stablecoins. In the future, the minimum contribution to earn interest (of rates around 6.5% annually) will be $1,000. At present time, however, it is aimed at exchanges and large holders and the minimum contribution is $100,000.
TrueUSD is the first token on the TrustToken platform. It has a network market capitalization of around $200 million at time of writing. Rather than a single centralized entity for holders to divest their TUSD tokens, a network of Trust entities is available within the TrueUSD redemption platform.
The TrustToken platform will ultimately enable the secure tokenization of many types of real assets, including things like real estate, business interests, sports teams, or intellectual properties. Basically anything that can be owned can be tokenized and thus traded. TrueUSD is merely the proof of concept of the TrustToken platform. In some regards, it can be seen as an effort to create a parallel economy with the blockchain at its heart.
One important differential between TUSD and USDC, PAX, or GUSD is that it is independent of exchanges. Where USDC is born of Circle, PAX is born of itBit, and GUSD is a Gemini creation, TUSD lives on its own network of liquidity.
Another part of their big December announcement is that they have expanded their network of Trust companies beyond firms regulated in Nevada. They now have outfits in Delaware and Ohio, as well.
The stablecoin wars are ongoing. Many aspects of it have not been fully reported in either the mainstream or crypto press. TUSD’s role thus far seems to be quietly trading far and above its market capitalization – $1.1 billion over the past month.
Featured image from Shutterstock.
Last modified: May 20, 2020 1:58 PM