STEEMIT CRYPTO ACADEMY WEEK 7: STABLECOINS-PART 2 HOMEWORK POST FOR PROF@yohan2on

I am very delighted to write my homework post for this week and also using this opportunity to say a very big thank you to prof @yohan2on fo this wonderful lecture this week.

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TRUE USD (TUSD) STABLECOIN

True USD is a type of stablecoin which is USD - backed ERC20 stablecoin that is legally protected and fully collateralized. It is the first regulated stablecoin which is fully backed by the US Dollar. TrueUSD’s value is pegged to fiat currency and was one of the first asset token created on TrustToken platform.

The TrueUSD also uses various escrow accounts to decrease the risk involved and also provide legal protection for the account holders against misappropriation. The value of TrueUSD is pegged to one or more currencies, such as the US dollar and the Euro in a fixed ratio.

WHO ARE THE POSSIBLE USERS OF THE TrueUSD STABLECOIN?

TrueUSD can be used by many users including;

1. Financial organizations

2. Developing economies

1. Mainstream commerce

2. Traders and exchanges

3. Also for long-term financial contracts such as salaries and loans

DOES ONE NEED TO GO VIA THE KYC/AML PROCESS DURING BUY AND REDEEM OF TUSD?

Yes one is required to pass via that process. This is because, before one can buy TUSD or redeem TUSD via their application web, the current BSA/AML regulations requires one to provide his/her name, Tax ID, address, Date of birth, National ID card and Verification of address that is if you are not a resident of US.

HOW DOES TrueUSDT (TUSD) WORK?

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As mentioned earlier in my post, one requires the KYC/AML process in order to purchase or redeem TUSD token. As and when one passes the KYC and AML requirments, then one is free to buy/redeem TUSD tokens using their web application to another TrueUSD trust partner.

Trust Token doesn’t issue tokens personally but they rather employ publicly audited smart contacts, meaning the Trust Token team never get in touch with the Token that is being purchased or redeemed. There is one to one ratio between the money in the escrow accounts and the TUSD in circulation whenever new TUSD is redeemed or purchased.

HOW TO PURCHASE TrueUSD TOKEN USING THEIR WEB APPLICATION

1. The user submits a wire to the trust company with their information of their crypto wallet.

2. After the trust company receives the information, the trust company then sends a signal to TrueUSD smart contract verifying the purchase of the token.

3. The corresponding amount of the TrueUSD coins purchased is then sent to the user through the crypto wallet provided in the first step.

4. The TrueUSDT is then received by the user and confirmed.

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HOW TO REDEEM TrueUSD TOKEN BACK TO USD USING THEIR WEB APPLICATION

1. The TUSD tokens are sent back to the smart contract address from the user.

2. The Trust company is then notified and this calls for a fiat transfer back into the user’s account.

3. Corresponding amount of USD is then wired to the user’s account immediately.

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RATES/ FEES INVOLVED IN PURCHASING AND REDEEMING TrueUSD TO USD

The fees involved in purchasing and redeeming TrueUSD to USD is $75 or 0.1% of it and then the fees for sending TrueUSD between ETH wallets is 0.1%.

HOW TO OBTAIN TrueUSD (TUSD) TOKENS?

1. One can get TrueUSD via exchanges such as Binance, HitBTC, Bittrex, P2PB2B, OkEx etc

2. One can also obtain TrueUSD by purchasing it via the TrueUSD application as explained above in my post.

3. One can again otain TreuUSD by the use of instant exchanges such as Changelly, Faast, ShapeShift and others..

HOW TO STORE TrueUSD (TUSD) TOKENS?

TrueUSD tokens can be stored in any wallet which supports the ERC-20 standard. The best examples include; MyEtherWallet, MetaMask wallet and JAxx wallets.

ADVANTAGES OF USING TrueUSD (TUSD)

1. They are fully collateral

2. They are trustworthy fund management due to how they exchange USD directly with escrow accounts.

3. There is authentications regularly which are published openly for all accounts holders.

4. There is also strong legal protection

5. It provides an opportunity for users to redeem TUSD for USD.

DISADVANTAGES OF TrueUSD (TUSD)

1. Minning in TrueUSD is not possible as in other crypto currencies like BTC mining.

2. TrueUSD is centralized.

CONCLUSION

The TrueUSD token is currently working as a good stablecoin with the growing globe. From my research on this, I would say that TrueUSD would maintain stability by remaining asset backed since they use algorithms to maintain stability.

Special Appreciations to;
@yohan2on
@steemcurator01
@steemcurator02