Even though the technology has been discussed in tech circles and amongst insiders for years, it is only recently that cryptocurrencies have started making their way into the mainstream. As values of currencies begin to rise, it is hard for investors to keep their eyes off these new digital assets.
With Bitcoin’s meteoric jump in value over the past couple of years resulting in a price of over $14,000 a token at the end of 2017, a variety of new cryptocurrencies have begun to appear in the market to challenge and compete with the success of the original Blockchain based transaction system. The problem many investors find with Bitcoin and other altcoins is that they struggle to maintain a consistent value and are almost completely unpredictable as their value relies solely on the supply and demand of tokens.
The solution to this volatility, in the minds of many crypto enthusiasts, lies in Stablecoins. These alternatives to traditional crypto assets attempt to offer their users a guarantee that the currency will remain stable by either implementing complex economic models to help guide the markets or backing their newly launched crypto assets with real-world assets like precious metals or fiat currency. While the idea is a noble one, recent examples of Stablecoin launches have not been very convincing for investors.
Tether, a recently launched, USD backed Stablecoin, reached a market capitalization of over $2.21 billion. However, investors and markets still remain skeptical of the currency as the Tether platform lacks transparency that would offer investors important information on the status of their assets.
This is where Stanford-StartX and Founders Fund-backed startup TrustToken is looking to step in. The company has an ambitious plan to replace clunky Stablecoins with a streamlined experience that offers unmatched transparency and security.
One aspect of TrustToken’s TrueUSD token that is unique is that it is 100% collateralized by real US dollars at all times, offering users of the currency unprecedented stability. Through a network of fiduciary and banking partners, the funds are stored by multiple third parties that are already trusted to hold funds. The startup never touches the funds. This way, TrueUSD presents a unique model that overcomes the problems of centralized fund management faced by Tether and other potential attempts to create a collateralized USD-backed cryptocurrency.
In order to offer its users confidence in the value of the funds, TrueUSD has implemented a system of monthly, transparent audits of the multiple bank accounts used to store TrueUSD funds. These audits allow investors to scrutinize the TrueUSD tokens in the same way they would evaluate any other asset, a level of analysis that users of other Stablecoins are not able to access.
In addition to its deep financial backing and commitment to transparency, TrustToken has also teamed up with Cooley and WilmerHale to develop a proprietary, trust-based legal structure for the assets.
Within this suite of tools, TrueUSD has given its token holders enforceable legal rights over their assets, a claim that no other Stablecoin can currently match. The company has also teamed up with a network of compliance partners to ensure that the market functions in a proper manner and ‘gaming’ the TrueUSD tokens isn’t possible.
The company has also looked towards crypto-focused funds and investors, marketing the coin as a stable alternative to current cryptocurrencies that allows investors to hedge their bets in more volatile currencies without having to leave the crypto market. By lowering the exposure of these investors and funds, TrustToken is aiming to build confidence in the crypto marketplace, proving that it can function in a stable manner like any other industry.
The TrueUSD coin also has benefits for the mainstream consumer. Every day, people can now enjoy the transactions speeds, security and privacy guarantees of cryptocurrency without having to sacrifice the stability of fiat currency.
As more and more cryptocurrencies enter the market, it will be important to focus on which companies are offering tokens that are both stable and trustworthy. TrustToken, a brand-new startup with engineers from Stanford, Google, and Palantir, has developed the world’s first trustworthy, USD backed Stablecoin that offers immense amounts of support for investors and everyday people alike.