New Market Addition: Gemini dollar (GUSD)

New Markets
1

Hi everyone in the Compound community!

In recent months, we’ve been boosting the Gemini dollar (GUSD) presence in the DeFi ecosystem. We think being part of Compound would be a valuable addition to the protocol and a great next step for the GUSD.

Gemini dollar

Gemini Trust Company, LLC is a U.S. company regulated by the New York Department of Financial Services. Gemini dollar (GUSD) bank reserves are eligible for FDIC insurance up to $250,000 per user while custodied with State Street Bank and Trust. USD reserve audits are published monthly by an independent registered accounting firm, BPM LLP. The GUSDEthereum smart contract was launched in September 2018 and has been audited by Trail of Bits. There are no fees to create or redeem GUSD through Gemini and Gemini currently covers all gas costs to withdraw on-chain.

DeFi Ecosystem

GUSD is one of the first fiat-backed stablecoins on Ethereum with approximately $210mm in float. The GUSD Aave market size is $30mm, the GUSD Curve pool has $30mm locked, and there’s more than $7mm locked in our Yearn vault. GUSD is also tradeable on Uniswap and is active as Vault collateral on Maker. Gemini users have been able to trade COMP since September 2020.

Benefits

GUSD can always be created and redeemed with USD 1:1 on Gemini. As one of the most popular exchanges and fiat on-ramps, we think our users would find Compound’s interest rate markets attractive and bring further growth to the protocol. We also believe Compound and the general DeFi ecosystem can benefit from diversifying exposure to different centralized stablecoins by including trusted, highly regulated issuers like Gemini.

In addition, we are increasingly exploring strategies that can augment Gemini’s value-add to DeFi and support for the ecosystem. These include thinking about possible product integrations and having active relationships with regulators to figure out the friction points and possible solutions that can help us best collaborate with teams like Compound Labs. GUSD could act as a natural gateway asset for these future plans and facilitate possible integrations and support for Compound.

Proposal

We propose including a GUSD market with an initial collateral factor of 0% to start with.

Later on, we’d love to have conversations with the Compound community about increasing the collateral factor and adding COMP distribution for the market.

General Information

Whitepaper: https://gemini.com/static/dollar/gemini-dollar-whitepaper.pdf
Website: Gemini dollar (GUSD) | Gemini
Twitter: https://twitter.com/Gemini
Source code: GitHub - gemini/dollar: Gemini dollar contract source code
GUSD token contract: $0.9874 | Gemini dollar (GUSD) Token Tracker | Etherscan
Independent accountant’s reports: Gemini dollar (GUSD) | Gemini
Trail of bits contract audit: https://gemini.com/static/dollar/gemini-dollar-trailofbits-audit.pdf
COMP available on Gemini announcement: PAX Gold, Amp, and Compound Trading Now Available | Gemini

Please reach out to me if you have any questions. Thank you.

Onward and Upward,

Tyler Winklevoss

6 Likes
2

As a member of the Gemini team focused on the growth and adoption of GUSD, I am highly in favor of this proposal!

2 Likes
3

Thanks for the concise and well-documented summary, Tyler! I think that Gemini’s compliance-first approach is likely to resonate well with the Compound community.

I think that with respect to the Compound protocol, GUSD occupies an unusual place in the stablecoin market today. On the one hand, it is one of the most highly regulated stablecoins and enjoys liquidity on most major DeFi platforms, as highlighted by Tyler. However, as of today, it would be the lowest market cap stablecoin on Compound (by about a factor of 5) if adopted.

I am in favor of adding GUSD in principle on the grounds that the protocol should endeavor to support high-quality stable assets with adequate liquidity, even if they are not the stablecoin-du-jour.

I think it would be helpful if Tyler or another Gemini team member could offer a brief, high-level overview of the protections in GUSD’s PrintLimiter.sol and LockRequestable.sol contracts. Among the risks Compound governance must weigh when considering new assets, the risk of an attacker exploiting an on- or off-chain mechanism to mint fraudulent stablecoins is among the most critical. What kinds of time delays are associated with raising the ceiling and printing new GUSD?

1 Like
4

Hi! Happy to help.

The PrintLimiter contract governs increases to the token supply. The basic logic to increase the token is contained within ERC20Impl. PrintLimiter enforces a balance of ‘online’ and ‘offline’ control of the token supply for Gemini.

The limitedPrinter account is the account that can increase the token supply, but only up to a ‘ceiling’.

That limitedPrinter account is in our online key infrastructure so that we have low latency control over the token supply, but within the bounds of the ceiling.

That ceiling is controlled by the Custodian of the PrintLimiter (print custodian). This contract enforces multi-sig control, where in our instance, the keys in that multi-sig arrangement are in offline key infrastructure. To raise the ceiling, we must sign a transaction with a quorum of offline keys.

The above is described in the whitepaper with a bit more detail as well, in case that helps.

> Edit: wrong link for custodian of PrintLimiter.

1 Like