TrueUSD Listing Proposal

Hello - I’m Rafael, CEO of TrustToken, and our team would like to propose listing TrueUSD on Compound.

We believe TUSD would be a valuable addition to Compound as it has reliable live price feeds, strong community interest, and sufficient market liquidity.

Down the road, other TrueCurrencies, such as TCAD, TAUD, TGBP, and THKD, could also add value to the Compound platform by allowing users to on-ramp via their native currencies or speculate on Forex with leverage.

Why TrueCurrencies?

Popularity: TUSD has been listed on AAVE since 2019, currently ranks 3rd in market size among stablecoins on AAVE, and makes up 13.6% of AAVE’s total market size.

Largest AAVE markets at time of writing, sorted by Total Borrowed:

If TrueUSD performed similarly on Compound, we expect that it would become Compound’s third-largest market in terms of total borrow (after DAI and USDC).

Transparency: TUSD is the only stablecoin with live attestations to corroborate TUSD out in the market with dollars held in escrow. These attestations are facilitated by top accounting firm Armanino, LLP.

Reliability: Based on DeFi Score, TUSD on AAVE has the highest trust rating of any fiat-backed stablecoin currently listed on the platform.

Liquidity: TUSD is at over $280M in market cap at the time of writing, ranking as the 4th largest stablecoin after USDT, USDC, and DAI. It enjoys deep liquidity on both centralized and decentralized exchanges.

DeFi Adoption: The MakerDAO community accepted our TUSD collateral application and is in the process of green-lighting TAUD, TGBP, and TCAD.

Status:

  • TUSD Proposal Poll: (99.99% voted “Yes”)
  • TGBP Greenlight Poll: (100% voted “Yes”)
  • TAUD Greenlight Poll: (100% voted “Yes”)
  • TCAD Greenlight Poll: (100% voted “Yes”)

Access: TUSD is widely available through both 1st party and 3rd party fiat-to-crypto on-ramps, creating a new entry point for both individual and institutional Compound users. You can mint and redeem it right here.

Differentiators

TrueCurrency holders can rest assured that their tokens are actually redeemable 1:1 for Fiat by checking our real-time attestation of reserves.

We are working to bring this data on-chain in the coming months through partnerships with Oracle providers.

Because TAUD, TCAD, TGBP, and THKD are not pegged to the US dollar, Compound users in those respective jurisdictions would be able to participate in DeFi without taking on Forex risk by leveraging TrueCurrencies and borrowing from Compound against their native fiat currency.

Legal Info

TrueCoin, LLC, manages the smart contracts of TrueCurrencies. It is a wholly-owned subsidiary of TrustLabs, Inc, which is a Delaware, USA registered company.

Independent, third-party banks and trust companies in the United States and Hong Kong manage the fiat collateral backing TUSD in escrow accounts held for the benefit of all TUSD holders.

TrueCurrencies are fiat-backed stablecoins that are fully-collateralized (1:1 backed) with fiat held by banks and trust companies.

Weaknesses

TAUD, TCAD, TGBP, and THKD have lower liquidity when compared to TUSD. However, for each of our stablecoins the Compound community is open to onboarding, TrustToken can commit to providing $1mm of liquidity at the time of listing to seed the market.

Feedback

We think there is a strong partnership here and would love to work with the Compound community to address any questions or concerns.

4 Likes

Well let’s get more reporters in the open oracle that include tusd. From my views, adding more assets is not the priority. Are you in some way affiliated with forex? You mention it a lot.

Hey @TennisBowling - in addition to being the creators of TrueUSD, we’ve also created TrueAUD, TrueCAD, TrueGBP, and TrueHKD. Each of these is a stablecoin that’s backed by the corresponding fiat currency 1-for-1.

We think that, at some point, listing these currencies in addition to TrueUSD could add novel use-cases for Compound.

Compound community members- would love to hear if you’d support this listing, and if not, what your concerns would be.

Thanks for proposing this to the community @rafael.cosman. The community has not yet added any tokens since it has been given control through governance. I believe the community will be adding a token in the coming month and bringing up TUSD after it has been done will likely allow for more traction.

As for TUSD in specific, I don’t really see how it adds much utility supporting it. From short research, it seems like the the far majority of TUSD usage is due to the yCurve pool. Total Uniswap liquidity is at $30k. The Compound community is very security oriented and I don’t think that the benefit added from supporting TUSD now counteracts the downside of adding another point of centrality to Compound.

1 Like

Hey @arr00, we do believe TrueUSD would have strong demand on Compound and would be one of the most popular assets. As I mentioned earlier, TrueUSD makes up a significant amount of AAVE’s total market size (increased since my original post from 13.6% to now being 14.3%) and is the third most borrowed asset on the platform.

We think similarly that if TrueUSD were listed on Compound it would be one of the most demanded assets, likely ranking third (after DAI and USDC) in terms of total borrow.

The other TrueCurrencies (TAUD, TGBP, TCAD, and THKD) are smaller products than TrueUSD, and would likely have less total demand, but would allow Compound users to directly on-ramp via many different fiat currencies which is not possible today.

On centralization- unlike most other stablecoins, the TrueUSD smart contract is owned by a special security management smart contract which requires additional signatures for larger mints. This protects token holders and DeFi protocols such as Compound. TrueUSD is also the only stablecoins to have real-time audits, adding a further layer of protection for DeFi protocols such as Compound. Finally, we’re now working on getting the balances backing TrueUSD reported on-chain by oracles, and we’ll have more updates on this project soon.

Uniswap liquidity- we know it’s low and it’s something we’re working on, should have some updates on this soon.

1 Like

@rafael.cosman to @arr00’s point above, he was pointing out that the majority of TUSD comes from the Curve “yCurve pool”, which currently has 268M of TUSD (supplied to Aave); and some basic block exploration shows that the majority of TUSD borrowed is for the same yCurve pool, which has been yielding 100%+.

Screen Shot 2020-08-25 at 6.58.51 PM

Most of the pitch above is talking about other platforms – what are the benefits and risks to COMP holders of adding it to the platform? Do you have data on usage overlap with the existing users? Would it add anything new?

1 Like

@rleshner- the benefit to $COMP holders is diversification beyond the 2 assets that drive the overwhelming majority of Compound usage today, as well as significant increased usage of the platform, something that, right now, our stablecoins are the assets most likely to provide.

Compound is one of the DeFi projects that I personally am most excited about. It’s got great technology, great design, and a widely respected token model. I think it’s going to be successful long-term, but to get there, it’s going to need to have more than 2 assets with significant usage. Let’s look at the numbers. Compound today lists 9 assets:





These are 5 of Compound’s 9 assets, and their total borrow, combined, is only 17.4mm. This constitutes about 1.8% of Compound’s total borrow. Their supply interest rates range from 0.00% to a low 1.11%.


The next two assets have a little more usage, together totaling 48.6mm in total borrow. This is about 5% of Compound’s total borrow.


These two assets (both stablecoins) make up 93% of Compound’s total borrow. It’s a significant risk to the platform to have only two assets making up such a large percentage of total borrow.

Because 7/9 assets on Compound, a platform for lending and borrowing crypto, have limited demand today for lending or borrowing, just two assets make up 93% of Compound’s total borrow (as well as 69% of its total supply).

Just to be clear, that means that all 7 other assets listed on Compound, all combined, make up <7% of the total borrow.

image

Given that both of the highly-demanded assets are stablecoins, the hypothesis I’d propose is that, by
far, what people are interested in lending and borrowing, today, are stablecoins.

Could this just be an anomaly because users are borrowing and lending Dai to farm $COMP? Unlikely, given that AAVE also has 92% of its total borrow from stablecoins, even though it lists different products.

But unlike Compound, their usage is more diversified: their top two assets only constitute 58.6% of their total borrow, and we’re working with them to list additional non-USD stablecoins that can diversify their platform further.

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Looking at the usage data from both lending platforms suggests that while not all stablecoins make big markets, all big markets, today, are stablecoins.

How this collaboration can benefit $COMP holders

We’re an issuer that’s bringing to the table 5 highly trustworthy stablecoins, both USD and non-USD. If the Compound community is interested in diversifying and creating new markets that get significant usage, we think these products are the best bet. There isn’t any other partner where you can get this potential for growth and diversification, while only taking on the risk of a single issuer.

Right now, Compound’s listings don’t correspond to what people (and smart contracts) actually want to lend and borrow: stablecoins. For example, while Augur, WBTC, and BAT are excellent projects, it’s no surprise that they receive tepid usage on Compound given how much usage they get elsewhere. As a comparable, these three products are all also listed on AAVE and, all combined, make up <1% of AAVE’s total borrow. Compound’s situation could be radically different but that’s not what the data suggests.

When it comes to stablecoins, TrueCurrencies meet or exceed the level of trust of existing stablecoins on the platform.

  1. Based on DeFi Score, TUSD on AAVE has the highest trust rating of any fiat-backed stablecoin currently listed on the platform, higher than DAI, USDC, and USDT, all of which are already listed on Compound. Why?
  2. TrueCurrencies are the only stablecoins with 24/7 live audits to prove each TrueCurrency is always fully backed. These audits are facilitated by top accounting firm Armanino, LLP.
  3. We’re now working with oracles to become the only stablecoins to live report collateralization on-chain.
  4. Unlike some other stablecoins, purchasing and redeeming TrueCurrencies is easy. Just go here.

We think this is a natural partnership and are very ready to invest in making it successful for both projects. Thank you for engaging with us, we’re looking forward to hearing your thoughts on this.

2 Likes

@rleshner- to directly answer your questions:

My understanding is that the yCurve pool puts TUSD into yEarn which uses a variety of strategies to pursue yield. Right now it primarily puts TUSD into AAVE but it could put a significant amount of TUSD into Compound were that possible. We see smart contracts such as yEarn as fully legitimate users of platforms such as Compound- they are ultimately just another gateway by which end-users access Compound.

This is difficult to acquire given that most existing compound users are anonymous Ethereum addresses, and listing TrueCurrencies would bring many new users to the platform. I’ve provided above what I think is the strongest evidence that TrueCurrencies would be demanded by Compound users, which is a pattern the data is clearly showing: stablecoins = demanded for lending and borrowing. Everything else = basically not.

TUSD would have better yield on Compound than on Aave, so all the funds from the yearn pool will likely come to Compound to farm COMP. This will increase TVL. Risk isn’t impacted much because most of the TUSD will be borrowed against TUSD. Same as with DAI now.

The value to Compound users is increased liquidity of TUSD, if that’s what you’d like to borrow (Personally I trust it a lot more than USDT).

The value to COMP holders is higher TVL looks good and might pump the price as well as more funds in reserves that may be distributed in a distant future to holders of COMP.

3 Likes

Why would TUSD have better yields on Compound than on Aave?

Listing TUSD on Compound seems like a great way to diversify the collateral types and increase TVL through borrowing. Looking at the diversity in collateral posted by @rafael.cosman I think it makes sense to have an alternative to USDT and USDC. TUSD has real-time attestation of escrowed funds here: https://real-time-attest.trustexplorer.io/token/TrueUSD

As for Liquidity, TUSD already has a huge amount of liquidity on CEXs (usually ~100M volume per day) and through Curve or 1Inch exchange also has a good amount of DEX liquidity. I think seeing a bump in liquidity on Uniswap would help justify listing and support decentralized use of the asset.

2 Likes

Agreed. Based on the metrics above, listing another stablecoin may increase TVL by something like 10-25% while listing another volatile crypto might increase TVL by only 0.1-5%.

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Security update:

Also, to make it easy for busy folks, here’s a bullet-point summary of the key reasons we think listing $TUSD adds value for $COMP holders:

  • Listing TUSD on Compound will benefit $COMP holders through increased TVL and usage

  • Usage data suggests that on Compound, stablecoins are over 2x more popular than all other coins combined. The importance of this result is difficult to overstate.

  • As of Aug 26th, 93% of Compound’s total borrow (as well as 69% of its total supply) came from 2 assets, both stablecoins

  • This means the remaining 7 assets, all together, comprised 7% of total borrow

  • Listing TUSD will help diversify Compound, whose goal is to be a interest rate protocol for crypto, not for just 2 assets.

  • The overwhelming demand for stablecoins is not limited to compound- measured at the same time, AAVE also had 92% of its total borrow from stablecoins

  • TUSD is one of the largest stablecoins globally, after the 3 stablecoins already listed on Compound

  • While USDC has trusted brand-names like Coinbase behind it, when you look at what fiat-backed stablecoins are actually doing to be transparent and build trust, TUSD comes out as #1 globally.

  • For example, TUSD is the only USD-backed stablecoin to ever have 24/7 real-time 3rd-party audits and has the highest DeFi Score of any stablecoin listed on AAVE, higher than USDC, DAI, and USDT, all of which are already listed on Compound.

1 Like

With another point of centralization, maybe we could have it with the same interest rate model and a 0% collateral factor.

@TennisBowling if the Compound community feels that’s necessary, we understand. But given the ways in which TUSD matches or leads other stablecoins in terms of trust (such as the items mentioned above) we’d recommend both an interest rate model and collateral factor matching USDC.

Hey compound Community, we’re planning on submitting an autonomous proposal for listing TUSD soon.

We know Uniswap liquidity is one of the factors the community is considering when considering listing TrueCurrencies, so we want to share some progress that we’ve made there:

This brings total TUSD liquidity on Uniswap up to $920k. More to come soon. Let us know which markets are most important for Compound when considering liquidations, and we can increase those.

@rleshner - the MakerDao community recently determined that TUSD does add value to their platform. Support was added ~6 days ago with a 50mm DAI debt ceiling and we just hit that ceiling, making TUSD the 4th most demanded collateral type on the platform. It’s difficult to know how much larger the real demand is until the debt ceiling is raised.

Given TUSD’s strong usage on Maker and AAVE, why do you think it wouldn’t see similar high demand on Compound? If you really think it wouldn’t, happy to place a 100 $COMP bet on the subject :slight_smile: