Stablecoins are fundamental to the healthy growth of a blockchain ecosystem. That’s why the NEAR collective is excited to announce that TrueUSD (TUSD) is the first stablecoin coming to the NEAR mainnet.
TUSD is one of the world’s most secure and transparent stablecoins, and among the first to market. TUSD is collateralized 1-to-1 with dollars held in audited escrow accounts across multiple trust companies. This aggregate collateral is attested live - versus monthly, as is industry standard - by top independent accounting firm Armanino LLP.
As of writing, TUSD is the fifth-biggest stablecoin with a market cap of over $340 million. It’s available on over 80 exchanges, 160 markets, 20 OTC desks across five continents and is used across over 150 countries. However, TrustToken, the creators of TUSD, noticed that the scalability problems of the Ethereum blockchain were increasingly hampering the usefulness and functionality of their stablecoin, especially during the exploding popularity of DeFi.
Ethereum gas prices have gone up significantly since May 2020 (source: https://etherscan.io/chart/gasprice)[/caption]
Challenges With TUSD on Ethereum
Ever since the explosive growth of Decentralized Finance in 2020, gas fees on Ethereum have grown increasingly volatile. One day, a transaction might cost the equivalent of $0.25, while the next it would need $10 or more to complete. Unless you’re a sophisticated DeFi user, this makes participating in DeFi on Ethereum significantly harder, particularly for low-value transactions. Even for sophisticated users, gas fees across multiple transactions threatened the very yields DeFi would generate, demanding sizable sums to participate with positive ROI. Depending on how congested the network is, transactions can take a long time to settle or fail altogether. So users can end up paying a high transaction fee, waiting a long time, and ultimately not completing the requested transaction. It’s a poor user experience that discourages users to transact. [caption id="attachment_6366" align="aligncenter" width="1024"]Why TrustToken is Bridging TUSD to NEAR
The scalability problems on Ethereum made it increasingly hard for people to transact with TUSD at a reasonable price, and in a meaningful time frame. TrustToken started looking for a blockchain platform where they could expand the use cases of TUSD without sacrificing the integrity and the security of their underlying protocol. They found this platform in NEAR. Using NEAR, TUSD can become a stablecoin that:- has even lower gas fees, despite network fee fluctuations
- processes transactions in seconds, not minutes (1 second block time and 3 second finality)
- retains its built-in security
- supports a wide variety of use cases
- benefits from a full stack of developer tools, already launched MainNet