What is TUSD (True USD)? Whats the purpose of it? What is it good for? Is TUSD a scam?
These are all good questions that a lot of people are going to be asking with the growing popularity surrounding this cryptocurrency. In this short review I’ll be going over all you need to know about what it is, how it works, trustworthiness, etc.
What Is TUSD?
TUSD, which is the symbol for the True USD token, is a “stable coin” that is pegged to the US dollar. The term “stable coin” refers to its value being stable due to its attachment to USD.
Every TUSD has the value of $1 and is able to be traded in at TrueUSD.com for $1.
The Purpose of TUSD
There are different reasons for using TUSD and thus different purposes. It can be used as a worldwide currency that maintains a stable value but the more popular use will likely be a medium of exchange.
Stable coins like this bring stability to the volatile cryptocurrency market and are huge asset for active traders. With TUSD pairs on exchanges traders will be able to easily exchange volatile cryptocurrencies for the stable TUSD cryptocurrency when they feel the market is going to crash or just aren’t sure what they should do. It will act as a safe store of value that will hold its value even if the crypo market takes a nose dive.
How It Works
TUSD is an erc20 token that is in a smart contract on the Ethereum blockchain. Every time buyers purchase more TUSD, more tokens will automatically be minted and released into the ecosystem to that buyer. The money that is paid for the tokens will be locked away in a trust escrow account. When some one want to sell their TUSD back they will be able to receive $1 for every token. The tokens that they sell back will be burned (destroyed).
When a buyer purchases tokens and their money is locked away in the trust escrow accounts, they will actually be legal owners of that money which guarantees them the value of the real USD they put in.
There is no supply limit for TUSD. The more people that buy in the more tokens will be issued and the more people that sell out the more will be burned. This is how a 1:1 ration of TUSD to USD is ensured. There will always be the same amount of USD locked away in escrow as there is in circulation.
How Stable Is It?
Since TUSD can always be redeemed for $1 at TrueUSD.com, the price will remain very close to $1. It may rise and fall ever so slightly but it shouldn’t much at all.
If the price does start to drift away from the $1 mark arbitrage traders will jump in and profit from the difference, thus bringing the price back to normal.
Where to Store TUSD
Since TUSD is an erc20 token and runs on the Ethereum blockchain, you are able to store them in any full-fledged Ethereum wallet. MyEtherWallet is one of the most popular choices, which you probably already know about.
Alternatively you could store them with a hardware wallet like TREZOR or Ledger Nano, which would be more safe.
TUSD vs Tether
TUSD is better than Tether on just about every angle you compare the two. A couple reasons it is better include:
TrueUSD does not hold onto the funds that are brought in on its own in banks that no one knows about. The funds are stored by trust escrow accounts which are audited regularly.
Tether on the other hand has its funds stored away in banks that no one really knows about. They push off audits continuously and mint massive amounts of new Tether that does not seem to really to make sense. So whether or not Tethers are really backed by USD is something there is a lot of controversy around. And if they aren’t then who knows what the real value of a Tether is.
Owners of TUSD will have a legal guarantee that each TUSD is redeemable for $1.
If you look at Tether they literally say right on their site that there is no legal guarantee that holders can redeem Tether for real USD. It doesn’t really get much more sketch than this. If each Tether were really backed by $1 then they should have no problem with this but since they are not transparent at all and likely don’t have the funds to back up the Tether in circulation, they cannot make this guarantee.
Conclusion on TUSD
Its nice to see a stable coin that can be trusted. For a trader like myself these are powerful cryptocurrencies. Tether has been a savior for me at times but there is so much mistrust surrounding the whole operation that I do not like to deal with it and only will when I really have to.
TUSD is looking good as of now but I guess only time will tell how things pan out.
If you have anything you would like to add, any insight, or any questions on TUSD please leave a comment below…