What is TrueUSD- How Does This Smart Stablecoin Work

Price volatility is one of the primary reasons why the great majority of users are hesitant to use cryptocurrency as a payment channel. Stablecoins are popular crypto initiatives that aim to bridge the gap between the current financial system and blockchain technology. TrueUSD is a market leader in this sector, helping to drive cryptocurrency adoption.

What is Stablecoin?

Stablecoins are digital currencies linked to less volatile physical assets than the cryptocurrency market. Most of these cryptocurrencies are tied to the US dollar, but some are tied to commodities like oil and precious metals. A few stablecoins are also linked to other cryptocurrencies.

The fundamental goal of these coins is to resist sharp price swings and keep a constant value over time. It makes it possible for most people to benefit from the blockchain sector. Stablecoins allow merchants and decentralized organizations to store their assets or profits.

A well-known cryptocurrency tied to the US dollar is Tether (USDT). Since its debut, it has continued to uphold its position as the most reliable stablecoin. Tether’s reputation, however, has recently suffered due to multiple accusations. As a better alternative to Tether in this scenario, TrueUSD and other new-generation stablecoins have emerged.

What is TrueUSD (TUSD)?

TrueUSD is a fiat-backed stablecoin that is backed by USD currency. But, unlike Tether and USDC, the organization (TrustToken) in charge of the project’s operations cannot access the reserved US dollars because they are held in escrow accounts.

The reason for employing escrow accounts is that typical firms feel comfortable managing and distributing assets through these accounts. When businesses realize the value of smart contracts, the TrustToken organization will begin using them.

Until then, escrow accounts will be used as a substitute to satisfy users who want to utilize cryptocurrencies without ever being affected by volatility. TrustToken offers monthly auditing reports on Armanino LLP’s reserves.

TrueUSD utility

Traders and exchanges

Traders can enter the cryptocurrency market by buying TrueUSD (TUSD) rather than BTC or Ethereum. These tokens offer the most protection versus market volatility.

Mainstream commerce

Individuals and organizations can use this token to make online purchases without fear of huge price changes.

Developing economies

Traditional trading requires hefty transaction fees, which developing economies may avoid. They have easy access to global marketplaces and pay minimal transaction fees.

Long-term financial contracts

TrueUSD can be used by businesses to pay their staff around the world. Similarly, banks and other financial organizations can make TrueUSD loans available.

How Does TrueUSD Work?

The TrustToken team doesn’t collect money directly but has organized publicly reviewed smart contracts for this reason to build confidence with the public. At any time, the TrustToken team doesn’t have access to the investors’ funds. TrustToken has published information about escrow accounts on its website.

Users can send US dollars to these accounts to receive TUSD. When funds are deposited into an escrow account, the network will automatically mint TUSD in the same amount. When a token holder redeems US dollars, the TUSD tokens are instantaneously burned. As a result, TrueUSD’s value remains stable throughout time.

Before accessing these services, users must verify their identity by completing a KYC form at one of TrueUSD’s trust partners. After validating the money, the escrow corporation launches a request to release an equivalent amount of funds.

TrueUSD’s smart contract generates the necessary tokens and transfers them to the wallet given. These tokens can then be used to purchase other cryptocurrencies or held as assets by users. A reverse method is followed when a user wishes to convert TUSD to USD.

The user gives the tokens to the smart contract, and the trust corporation transfers the fiat currency to the user’s account. When purchasing or redeeming TrueUSD tokens, customers must pay 0.1% of the transaction amount. Similarly, when TrueUSD tokens are exchanged between Ethereum wallets, a 0.1% fee is applied.

TUSD Tokenomics

TUSD is an ERC-20 token created to aid in the widespread adoption of cryptocurrencies. It has a market cap of $866 million and a circulating supply of 867 million tokens. In terms of market cap, it’s in the 57th spot.

Pros of TrueUSD

TrueUSD is considered a superior option to Tether since it removes the need to employ an intermediary to purchase the cryptocurrency.

Full collateral

Unlike Tether and other stablecoins backed by US dollars, TrustToken cannot create new TUSD tokens until an equivalent sum of US dollars has been deposited into the escrow account. They’re created and burned by smart contracts based on user requests.

Legal protection

TrueUSD is directly linked to escrow accounts, and the TrustToken corporation releases monthly auditing reports on these accounts to maintain everyone up to date on their entire reserves.

Instant redemption

When a user wants to redeem US dollars, they can pay TUSD tokens to the smart contract, and the fiat currency will be deposited to their account in a matter of minutes. The minimum withdrawal amount is $10,000.

Regular attestations

Monthly escrow account reports are attested to by the famous auditing company Armanino LLP, and TrustToken makes the reports available to the public.

Conclusion

TrueUSD is a smart stablecoin created to help people who are hesitant to adopt cryptocurrencies owing to volatile price fluctuations. It is tied to the US dollar and keeps a steady value. TUSD, unlike Tether and USDC, is run by smart contracts, which prevent manipulation of the figures. Don’t hesitate to contact us if you require additional information about how TrueUSD works.