True USD: What's Good to Know About the New Fixed-Price Token Project
The rival to Tether is making serious claims to legitimacy, though not all questions are answered.
The world of crypto coins has had its attempts to create various forms of tokens with a fixed price. So far, the most widespread project remains that of Tether, which has kept its $1 level with minor fluctuations through all attacks.
Another asset, Steem Dollars (SBD) was more volatile, but still nearer to $1, before the platform abandoned attempts to fix the price and SBD appreciated and fluctuated more. DigixDAO was one of the latest projects to offer a gold-backed token.
"Stable coins are one of the most important elements of financial infrastructure that the cryptocurrency industry needs to develop. So far, price volatility has prevented mainstream adoption. There are a number of projects attempting to do this, but so far most have avoided providing 100% USD collateral. We think we’ve solved the collateral issue in a new way, using multiple custodial escrow accounts," said Rafael Cosman, founder of Trust Token.
But the TrueUSD asset, developed for months since last fall by the Trust Token project, is a new attempt to solve the problem of a low-volatility, dollar-pegged token. Here is what is known about the TUSD asset:
Volumes are still minor: In the first days of trading, 24-hour volumes were around 1/1000 those of USDT. The price fluctuated between $0.99 and $1.01, as expected in early trading.
Who issued TrueUSD: The new asset is the first asset-backed stablecoin by the Trust Token project. The service, True Coin, links bank funds in escrow with the issuance of the token. So far, it is unknown who are the banking counterparts of the True Coin service. The project will aim to launch other stablecoins in the future, as well as tokenized assets, including tokenized real estate.
What are the uses for TrueUSD: Beyond serving as a liquidity token on exchanges initially, TUSD may also be used for e-commerce, by being available for international transfers without exchange rate risk.
Who is on the team: The project was founded by the trifecta of Rafael Cosman, Stephen Kade, and Danny An. The project has brought in talent from Stanford University, Berkeley, Google, and Palantir. The team has legal backing from WilmerHale and Arnold & Porter, and there will be monthly reports on liquidity by Cohen&Company.
Which Exchanges are on Board: So far, only Bittrex trades TUSD against Bitcoin, and redemption into USD is performed through the smart contract as well as escrow accounts. More will be known as signups are open for regular investors.
Acceptance is still tentative: The TUSD asset has seen rightful skepticism, especially in comparison to Tethers. The Bitfinexed account criticized the TUSD project for an ambiguous message about redeeming TUSD:
In general, Twitter accounts that are critical of Tethers are preparing to look closely at the performance of TUSD as well.