Crypto Academy Week 7 - Homework Post for Yohan2on "The Stablecoin TUSD"

For today's article on Steemit Crypto Academy, we are going to talk about another stablecoin called "TUSD" or "TrueUSD". Let's study more about its history first. Just read on, thanks!

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It was first launched to a limited investor base in January 2018, growing to incorporate almost up to $400 million of backed tokens come October 2020, making it the 38th largest cryptocurrency by market cap. TrueUSD (TUSD) is founded byTrustToken co-founder and CEO Rafael Cosman, whose lifelong attachment to cryptography and artificial intelligence led him to create TrustToken in 2017.

With a pegged U.S Dollar ratio of 1:1, it is an ERC stablecoin that is the first to be developed on the TrustToken platform, on which tokens collateralized by assets are created and sold in different markets. TUSD is protected by a number of escrow accounts, as an ERC20 stablecoin would, whose agreements and contents must be published daily while going through monthly audits. An Ethereum address is needed to identify all smart tokens which use this token. Like BTC and ETH, it is also protected from the volatility of other digital coins.

For TUSD, TrustToken has partnered with registered fiduciaries and banks to hold the funds backed by the token securely. They believed that in time, TUSD would be able to come up with the long-awaited stable trading instrument for cryptocurrency traders, thus enabling them, as well as businesses and consumers, to use the digital currency as an exchange medium. They have also entered various partnerships in corporate so as to allow options for holders an increase in annualized passive income returns.

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With the help of escrow accounts, token holders are provided with regular attestations and strong legal protection. TrustToken does not have any direct access to the funds and, therefore, cannot abscond with them.

After passing a standard AML/KYC check and getting a verified account on TrueCoin, an individual or an institute holding a token is allowed to redeem TUSD for USD. In June 2018, a $10,000 minimum redemption requirement targeted for institutional users, aiming to reduce the minimum for future retail users.

Through TUSD’s legal framework, you can exchange USD directly with escrow accounts. This eliminates the need to go through TUSD’s banking and fiduciary networks to purchase or redeem TUSD. In doing so, it also reduces the risk of a common nuisance in other collateralized stable coin projects which is the counterparty.

As TUSD is always collateralized by USD, it is held in an escrow account of the professional trust company. To ensure a 1:1 parity among the USD account and the TUSDs in circulation, the TUSD is minted by the publicly audited smart contracts whenever an escrow account is cleared by USD and at the same time, burns the TUSD when USD is redeemed.

Leading auditors like Cohen & Co. regularly evaluate the published holdings of an escrow account, as they are updated and published regularly. Going through these independent third-party evaluations ensures the platform’s giving their best in regards to security practices.

With the deviation of price between TUSD and USD, it gives an opportunity for the arbitrageurs, appealing most to the larger investors who look for reduced risks.

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Being one of the largest stablecoins in circulation, TUSD is freely available on major exchanges, making it available alongside other pairs of cryptocurrencies and other stablecoins. It is also listed in various global trading exchanges paired with some major cryptocurrencies like BTC, ETH, BNB, KRW, and USDT.

The entire list of trading exchanges for TUSD also includes Binance, Bittrex, UPbit, and Cryptoria among others.

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TUSD as a stablecoin indeed has many use-cases and these may be helpful to some people or groups. Some examples are:

Those people who are looking to use financial services to enter into the cryptomarket and are looking for immediate exposure to either ETH or BTC or any other cryptocurrency/token.

TUSD can be used as an alternative trading pair in exchanges if one does not have the traditional currency purchase methods (like directly purchasing BTC through USD). When an exchange uses a stablecoin as a trading pair, there's a big chance that it can also be trusted by its users.

Without its immediate exposure to ETH and BTC, it gives a hedge against volatility in the entire cryptomarket. This makes it a great tool to use for cryptocurrency traders.

TUSD can be used by people in commerce through enabling the mainstream adoption of cryptocurrencies and through the stability of prices, salaries, loans, escrow, and purchases are enabled.

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These are some of the things that you should learn about when it comes to TUSD. For comparison, you can check my previous blog about another Stablecoin called Tether: Click to read: "The Stablecoin Tether".

I hope you learned a thing or two from this quick research of mine about TUSD. This research homework is brought to you by @steemitblog and @yohan2on. Thanks for the support @steemcurator01 and @steemcurator02.