TrueUSD

What is TrueUSD (TUSD)?

TrueUSD is a U.S. dollar stablecoin managed by TrustToken, a platform specializing in the tokenization of real-world assets, including but not limited to fiat currencies.

Just like other dollar stablecoins such as USDT, USDC, BUSD, and Dai, among many others, TrueUSD provides traders with a fast, unrestricted, borderless settlement.

Perhaps more importantly, stablecoins give traders the ability to trade into the relative, short-term safe haven of the U.S. dollar’s stability during times of high volatility in the crypto markets.

It should be noted that stablecoins are cryptocurrencies themselves. They give traders the advantage of agility, allowing them to trade back and forth from TrueUSD and cryptocurrency without needing to wait days until funds settle.

When Was TrueUSD Launched?

TrueUSD was launched to a limited investor base in January 2018. It was designed to be a simple, transparent, and reliable stablecoin that doesn’t use opaque bank accounts or complex algorithms.

In fact, TrueUSD rose to prominence in the blockchain industry quickly. It was an early leader in the space behind USDT, with the pair (along with USDC) being mainstays in the cryptocurrency top 50 through the end of 2018.

TrueUSD launched as an ERC-20 token on Ethereum in April 2018, before listing on Binance in May and hitting a $100 million market cap within a few months. The following year, TUSD launched on the Binance Chain, and it hit Avalanche and TRON in 2021.

Who are the Founders of TrueUSD?

TrueUSD is the first real-world asset tokenized by TrustToken, co-founded and led by CTO Rafael Cosman. He founded the company alongside CEO Danny An, COO Stephen Kade, and product strategist Tory Reiss.

Cosman is an expert in the field of cryptography. He has worked at Google Brain and Palantir after studying cryptography and artificial intelligence.

How Does TrueUSD Work?

Of the many stablecoin designs on the market, including algorithmic, commodity-collateralized, and cryptocurrency-collateralized, TUSD is a fiat-collateralized stablecoin.

Fiat-collateralized stablecoins are backed by fiat currency held in reserve, and TrueUSD is held at a 1:1 ratio to ensure proper backing and eliminate the risk of a run.

TrueUSD is managed using third-party escrow accounts. When these escrow accounts receive USD, TUSD is minted. When a user redeems USD from an escrow account, TUSD is burned. This minting and burning are carried out via a smart contract.

What is a Smart Contract?

Smart contracts are pieces of code that execute predetermined actions when a set of specific conditions are met. Deployed on the blockchain, these smart contracts are immutable and fully open source. This allows users to audit them with the knowledge that they can’t be changed once live.

These smart contracts are facilitated by Ethereum, on which TUSD exists as an ERC-20 standard fungible token. Ethereum is a highly secure, extremely decentralized blockchain that facilitates smart contract functionality via the Ethereum Virtual Machine.

Ethereum smart contracts make the entire TrueUSD minting and burning process reliant on code rather than human hands. The TrueUSD team doesn’t have any contact with the fiat funds or tokens changing hands between users and third-party escrow partners.

What Makes TrueUSD Unique?

One of the most important distinctions between TUSD and many alternative stablecoins is that its reserves are subject to an independent audit. This is important to note, as the launch of TrueUSD came at a time when USDT was the dominant stablecoin in the industry. Unlike TUSD, USDT has never allowed an independent audit.

The TrueUSD team openly publishes regular attestations that come with strong legal protection provided by the escrow accounts. These attestations continue to prove that the TUSD reserve holds as much USD as is required to fully collateralize the TrueUSD in circulation.

TUSD claims that it is the first independently verified digital asset redeemable for the U.S. dollar, and it is present on several blockchains. These include Ethereum, TRON, Polygon, Avalanche, Cronos, Fantom, and both Binance blockchains.

How is the TrueUSD Network Secured?

Since TrueUSD uses other blockchains rather than its own, it also has to rely on those other blockchains to secure its digital token. While others largely use variations of proof-of-stake and proof-of-authority, Ethereum is a blockchain secured by miners showing proof-of-work.

TrueUSD’s reserves, meanwhile, are secured by the banks that have custody of the funds therein. Among these banks are New York-based Signature Bank, crypto-friendly Silvergate, Nevada-based Prime Trust, Hong Kong-headquartered First Digital Trust, and California-based BitGo.

TrueUSD makes use of these respective banks’ platforms for minting services. This includes Signature Bank’s Signet, which allows users free, two-minute TUSD minting and 24/7 services via the Silvergate Exchange Network and PrimeX.

What is the Use of TUSD?

As a stablecoin, TrueUSD has many uses, as outlined in its whitepaper. The main use case for TUSD is trading. The majority of trading on cryptocurrency exchanges is done with stablecoin trading pairs, eliminating the double price risk of prior times when most cryptocurrencies had to be traded against other cryptocurrencies.

In offering a trading pair against cryptocurrencies, TUSD provides a relative safe haven. Cryptocurrencies are far more volatile than most other assets, meaning that traders are often exposed to major fluctuations in asset value. TUSD offers a short-term safe haven from this sort of wild swing in price since it is pegged to the more stable U.S. dollar.

TUSD also offers an excellent way to move money across borders. Leveraging the extremely fast, borderless, and low-cost settlement of blockchain networks, TUSD can be sent to any wallet irrespective of which country the user lives in.

TUSD also serves as a trusted store of value in countries where economic conditions, such as inflation, rapidly chip away at the value of the local fiat currency. In these countries, the U.S. dollar is looked at as a store of value, and TUSD is provably backed by the value of the dollar.

Who Controls TrueUSD?

TrueUSD is controlled by TrustToken, a platform that creates tokenized crypto assets.

Beyond tokenizing fiat currencies like the pound sterling, Canadian dollars, and Australian dollars, TrustToken also plans to tokenize assets like rental properties, timeshares, oil, movies, music, and patents.

How Much TUSD Is In Circulation?

There are over 1.2 billion TUSD in circulation, but that number can change every day. When users wish to redeem USD, they can cause TUSD to be burned by sending it back to escrow, and TUSD is minted using the reverse of that same process.

As such, as long as users first deposit USD in escrow, TUSD can be minted, and thus the supply in circulation increases.

How Do You Buy TUSD?

You can buy TUSD directly on TrueUSD’s website. However, there are many other ways to purchase TUSD. Many of the top exchanges in the world offer TUSD in a variety of trading pairs, including with other stablecoins like USDT.

That being said, TUSD is a stablecoin intended for cryptocurrency trading, so major exchanges also offer plenty of liquidity in trading pairs such as TUSD/ETH and TUSD/BTC.

Is It Possible to Buy TUSD Instantly?

The speed with which you can claim your purchased TUSD depends on what your method of buying it is. Purchasing TUSD on an exchange is instant, but that doesn’t mean that TUSD has settled. In fact, an exchange account is custodial, meaning that the exchange still holds the tokens for you.

Using TrueUSD’s minting system, in contrast, depends on the network you’re using. Some networks, like Signature Bank’s Signet, will only need a few minutes before your TUSD hits your wallet.

How Do You Store TUSD?

TUSD is a cryptocurrency, and it is therefore stored in a cryptocurrency wallet. The wallet you use will depend on the blockchain network you are using to transfer the TUSD tokens.

Generally, wallets come in two forms:

• Cold wallets. Cold wallets keep private keys offline and out of the reach of hackers and other bad actors. They could be in the form of electronic devices not connected to the internet, paper, or some other physical copy of the private key.
• Hot wallets. Unlike cold wallets, these connect to the internet. They could be either desktop clients or online/web wallets that store credentials with the online wallet provider rather than your hardware.

TrueUSD Energy Consumption

TrueUSD doesn’t run its own blockchain and therefore doesn’t consume any significant amount of energy.

Even the company behind it, TrustToken, doesn’t really have to spend very much in terms of infrastructure to maintain TUSD since they don’t actually handle any funds.

Is TUSD a Good Investment?

TUSD offers traders a quick exit from the volatility of cryptocurrency tokens and into the safe harbor of the U.S. dollar’s stability. This can allow traders to wait out extreme fluctuations and quickly jump back in to buy the dips.

It also lets traders in countries with weaker or less stable currencies store their funds in a U.S. dollar equivalent without having to enter into forex markets. This allows traders to avoid forex trading restrictions and limitations.

Still, being pegged to the U.S. dollar means that TrueUSD is subject to the depreciation or devaluation that most currencies experience thanks to the constant supply by central bankers.

For this reason, scarce currencies like Bitcoin and assets such as gold are regarded as good stores of value compared to fiat currencies.

The dollar peg also makes TUSD subject to other risks faced by the U.S. dollar, such as the chance that it may cease to be used as the world’s reserve currency.

Investing in TUSD also shows no real upside, aside from the marginal gains one may expect from forex trading and creating a safe haven from bearish market conditions.

Ultimately, TUSD was designed as a stablecoin, and stablecoins are meant to provide various use cases for the market that allow traders short-term benefits. Only those in a position to consider the U.S. dollar a good investment in and of itself tend to label TUSD the same way.