TrueUSD (TUSD) Review – A Fully-Collateralized Stablecoin You Can Trust

| Publish date: 06/26/2018 (Last updated: October 31, 2018 11:26 AM)
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NameTrueUSD
TickerTUSD
Token TypeERC-20
Total SupplyAround $80M
Website URLhttps://www.trusttoken.com/trueusd/

TrueUSD is a stablecoin that is fully collateralized by the USD dollar, meaning that that each 1 TUSD is redeemable for $1.00 USD. It also offers legal protection and full transparency. The company behind it, TrustToken, allows the development of asset-backed tokens that can be bought and sold around the world. TrueUSD is the first asset token created on the TrustToken platform.

The Idea and the Team Behind TrueUSD

TrueUSD launched at the beginning of the year in response to increasing concerns about the volatility of the cryptocurrency market in general as well as the increased speculation of Tether, another USD-pegged stablecoin, in particular. Criticism regarding Tether’s lack of transparency and inability to prove full dollar backing of each Tether led to the need for a fully-collateralized and transparent stablecoin in the market.

“TrustToken created TrueUSD to meet the strong demand we heard from traders to have a fully collateralized stablecoin,” TrustToken co-founder and CTO Rafael Cosman explained to VentureBeat. “TrueUSD’s rise to over $12 million market cap in less than two months since its launch demonstrates the value of a price-stable cryptocurrency that is truly redeemable for USD.”

The fiat funds are in an escrow account, so TrueUSD never directly touches the funds. These escrow accounts ensure both legal protection against misappropriation as well as regular third-party validation. Smart contracts guarantee a 1:1 parity between TrueUSD and USD in any user account.

TrueUSD was built on the TrustToken platform, a platform that enables anyone to create asset-backed tokens (i.e. tokenization) for global trading. TrueUSD is the first asset-backed token on the TrustToken platform.

The TrueUSD team brings together talent from top employers and schools such as Stanford, UC Berkley, Palantir, Facebook, Google, Goldman Sachs and Paypal. TrustToken is backed by startup accelerator Stanford-StartX and venture capital firms such as Founders Fund Angel, investment firm FJ Labs and cryptocurrency hedge fund BlockTower Capital.

Danny An, Rafael Cosman and Stephen Kade are all co-founders of TrustToken. Danny, acting CEO of the company, previously worked as the first engineer at Kernel, a company whose goal it is to build advanced neural interfaces to treat disease and extend cognition. He has a bachelors in information systems from the University of Texas at Austin. Rafael, the current CTO, was previously the co-founder of StreetCode Academy, a non-profit aimed at running high-quality tech education programs in East Palo Alto for hundreds of youth each year. He also worked at Google and Kernel in machine learning. Rafael has a bachelor’s degree in computer science from Stanford University. Stephen, the company’s COO, previously functioned as the co-founder of NeuroTechX, the world’s largest organization for noninvasive-neurotechnology developers. In the past he also worked as a project manager at Kernel. He has a bachelor’s degree in neuroscience and economics from UC Berkley.

 

What Makes the TrueUSD StableCoin Unique

TrueUSD is a stablecoin, or a cryptocurrency with a fixed price. Most of them peg, or attach, the price of the cryptocurrency to a fiat currency such as the dollar. This is in contrast to most cryptocurrencies which are known for their price volatility.

In contrast to algorithmic stablecoins such as Basecoin or MakerDAO, which are protocol-based, TrueUSD is asset-backed. TrueUSD believes that while algorithmic options cater more towards crypto startups, asset-back tokens will be preferable to more traditional financial institutions. Stablecoins such as Tether also peg their cryptocurrency to the dollar, but the coin has become shrouded in controversy, with claims that the Tethers are not backed up with dollar reserves at a one-to-one ratio.

The TrueUSD stablecoin offers unique advantages over other stablecoins, including:

 

 

 

 

TrueUSD is only redeemable to those able to pass a Know Your Customer (KYC) and Anti-Money Laundering (AML) check.

 

 

 

 

 

Since TrueUSD is backed by the USD, it acts as a stable currency for digital exchange.
 

 

 

 

Each TrueUSD is 100% collateralized by USD and held in banks with full transparency, subject to regular audits by a trusted third-party.

 

The TrustToken Platform

The blockchain has allowed the exchange of digital assets, but what about the $250 trillion market of real-world assets? These include assets in vertical markets such as real estate, small businesses, stock, bonds, fiat currencies, and even music and TV shows.

The TrustToken platform allows any asset to be tokenized and traded on a global liquid exchange. With the TrustToken platform for example, silver can be transformed into silver tokens, Euros into Euro tokens, and even intellectual property such as TV shows or music into tokens as well. Tokenized assets on the TrustToken platform can issue their own new coins which represent fractional ownership and control of the asset. TrueUSD is the first asset-backed token on the TrustToken platform.

Here’s how you create tokens for an asset:

Take whatever you’d like to tokenize, whether it’s a small business, intellectural property, or real estate, and then put into a SmartTrust. SmartTrusts are an improved version of the legal trust traditionally used for wealth and asset management. This trust appoints beneficial ownership of the asset to a smart contract on the blockchain. Now SmartTrust tokens can be distributed, allowing each beneficiary fractional ownership of the asset. These tokens can now be traded globally. This process of creating tokens is called tokenization.

Tokenization benefits include:

  • Liquidity premiums – Tokenized assets can be traded on a global liquid exchange, therefore becoming more valuable to investors
  • Network effects – Fractional ownership democratizes financial opportunities, so that a small business owner in India has access to the same pool of investors as do billion-dollar corporations.
  • Invest worldwide – The opportunity to invest is open to anyone, anywhere in the world.

This tokenization allows for advantages for a number of players in many different verticals, including:

  • Financial services – Financial services can now enter the crypto market without worrying about volatile BTC or ETH payments. TrueUSD offers greater security than other cryptocurrencies with receipts and proof of ownership for all TrueUSD tokens.
  • Cryptocurrency traders – Individual crypto traders can also now hedge against volatility in the cryptosphere with TrueUSD tokens, avoiding immediate exposure to volatile price swings in BTC and ETH.
  • Exchanges – The traditional exchanges can now offer users trading with a stablecoin, a secure alternative to traditional currency purchase methods.
  • Commerce – In addition to the financial market, online purchases, salaries, escrow and loans can also be paid with TrueUSD. Price stability will encourage mainstream adoption of the stablecoin.

How TrueUSD Maintains Price Stability

TrueUSD tokens are always backed by the same number of dollars in the escrow
account used to collateralize the tokens. Ensuring this 1:1 parity maintains that the
tokens are redeemable, which is necessary to maintain each TrueUSD as equal to
$1.00.

In addition, the supply of TrueUSD will never be artificially increased. TrueUSD’s
accounting firm, Cohen & Co, ensures that TrueUSD adheres to full transparency and
would alert the community to any arbitrary increase of TUSD.

How to Purchase TUSD

Binance is currently the main option for purchasing TUSD either by purchasing it with USDT, BTC, ETH or BNB. It is also the exchange with the highest volume of trading.

TUSD is also available on the following exchanges:

How to Store TUSD

TUSD can be stored in any wallet that supports ERC-20 tokens such as Coinomi, MetaMask and Myetherwallet.

For maximum security, however, you should store your TUSD on hardware wallets such as Ledger Nano S and Trezor.

Future Aspirations of TrueUSD

Currently, TrueUSD is backed by the USD. In the future, TrueEuro, TrueYen and stable baskets of tokenized goods (including precious metals and real estate) may be developed. The plan is for individuals to be able to create their own baskets of tokenized goods, with the market deciding which assets are the best stable currencies.

The long-term goal for TrueUSD is to become a stablecoin that the industry can trust.

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