TrueUSD is a prime member of the stablecoin community. Mixing a good reputation with a strong design, TUSD has been a steadily rising star in the cryptocurrency ecosystem, helping to offset the notorious volatility of the crypto markets.
Let’s read on to learn exactly how TrueUSD is being used in today’s market.
What is TrueUSD?
TrueUSD or TUSD for short is a collaterally backed 1:1 stablecoin. This stablecoin is a USD fiat pegged cryptocurrency that is backed by multiple banks and various third-party companies. These companies and banks hold TUSDs collateral in escrow and subjects the amount of currency in circulation to a system of real-time monitoring and third-party accountancy audits.
On a technical level, TUSD operates off an ERC-20 standard. The ERC-20 is a mainstay in the cryptocurrency ecosystem as it offers a robust architecture and a high degree of versatility. In the TUSD case, this ERC-20 has been modified with some minor alterations, such as better token management protocols and better gas/cost architectures.
This popular stablecoin was originally launched by the San Francisco start-up, TrustToken in 2018 by CEO and co-founder Danny An. At the time of writing, TUSD was ranked as number 68 by coinmarket cap and is hosted on a variety of different exchanges such as Binance, Huobi, OKEX, and CoinTiger.
TrueUSD as a company has enjoyed a high degree of success and has made it known that it intends to move towards a variety of other pegged stablecoin projects, such as metal pegged tokens or other pegged fiat currencies such as TrueYEN and TrueEURO. But in this article, we explore TUSD specifically and discuss some of the many use cases of this stablecoin, from its auditing features, its quick speeds, and its high degree of integration.
TrueUSD Use Case: Price Stability
For a stablecoin to be considered useful, it has to be just that, stable. To achieve this stability, coin providers need a mixture of reputation, collateral, and transparent liquidity provisions. In the case of TUSD, some forthright means of auditing have given the stablecoin a good reputation for stability, granting the coin one of its key use cases.
To best understand TUSDs use case in this regard it helps to explore the financial concept of escrow. Escrow means the act of placing a good or asset in the control of another company, that can then only use said asset in such a way and at such a time as outlined by a contract. In essence, escrow functions as a ‘Smart Contract’ to different asset classes, except held by a third party.
TUSD places its USD into various companies that hold the pegged fiat in escrow. According to TUSD’s White Paper, these banks and companies then provide monthly, to bi-monthly attestations of the held USD, ensuring that everyone is well informed of the collateralized nature of the stablecoin. This allows businesses and users alike to use TUSD in a host of various financial functions with its stability assured.
In addition, this approach means that no one entity is in control of the entire fund, ensuring against any bad faith actions or deceit on the part of the stablecoin provider or collateral holder.
TrueUSD Use Case: Security
The security of a stablecoin is an extremely important consideration for users and businesses alike and TUSD has an interesting use case in this regard. By partnering with multiple banks and professional Trust Company’s TrueUSD effectively ‘spreads out’ its points of collateralization, ensuring that the stability and security of the coin aren’t overly centralized to any one point. This approach of stratifying collateral through various sources mitigates counterparty risk, as each ‘layer’ provides its own transparency and regular attestations, allowing for users and businesses to keep an informed eye on the security of their TUSD.
The structure of this system is split into various banks and different ‘Trust Companies.’ These banks such as US Bank, Alliance Bank, or Mercantile Bank store the pegged USD funds and operate through Trust Companies such as Alliance Trust, Prime Trust, or the Company of Nevada. These companies then provide legal representation and are obliged to act as per KYC and other financial regulatory standards.
This decentralized approach to collateral holding and trust partnerships grants users a comforting degree of security which in turn increases the overall value of TUSD. Additionally TUSD’s partnership with so many different banks and Trust Companies grants an overall better level of integration of the token.
TrueUSD Use Case: Cheap, Trusted Transactions With Autosweep
Another interesting use case for TrueUSD is its ‘TrueUSD Autosweep’ function. This interesting piece of architecture is one of the aforementioned developments of the ERC-20 blockchain standard. Essentially this function allows for users of the token to create trusted listings of 220 trading partners that automatically exchange addresses, allowing for partners to send funds directly into each other’s central wallets.
TrueUSD Autosweep allows for various businesses and traders to engage in trusted levels of trade in a direct and very importantly, cheap fashion. Most trades on a blockchain require a system of validation and authenticating to confirm the transaction and to prevent double-spending. This system can require quite a bit of energy expenditure on the part of node operators and therefore incurs Gas charges to the users.
Gas charges can vary but are nonetheless an important consideration for users and businesses alike. TrueUSD Autosweep circumnavigates much of this problem by linking clients’ wallets in a pre-approved trusted fashion, requiring far less validation while still being secure, auditable, and with very low gas costs. The use case of a function that allows for quick, direct, and cheap transactions is somewhat self-evident and is a key reason for TrueUSD popularity amongst users.
A Stablecoin Mainstay
TrueUSD is a reliable and well-integrated member of the stablecoin ecosystem. By addressing some of the problems that have faced other stablecoins in the past, TUSD has moved into a position of security and trust for its many users.
It is very likely that as long as TrueUSD maintains its transparencies, decentralized collateral and versatile functionality TrueUSD will have a bright future in the crypto space.