Andreessen Horowitz-Backed TrustToken Has Built a Transparent Stablecoin
Stablecoins are rapidly becoming a focal area in the cryptocurrency industry, with a number of big investors and companies placing bets on startups building these digital assets.
Here’s a running list of the major names:
- Tether: 1:1 price ratio with the U.S. dollar; Affiliated with the owners of Bitfinex
- Basic: Non-collateralized token; Bain Capital Ventures and Andreessen Horowitz
- Reserve: Non-collateralized token; Backed by Coinbase and Peter Thiel
- Circle USD Coin: 1:1 price ratio with the U.S. dollar; Goldman Sachs and Bitmain
- Stronghold: 1:1 price ratio with the U.S. dollar; Backed by IBM
Undoubtedly, the most well-known stablecoin is Tether, due in large part to the controversy surrounding the company’s auditing history with many claiming that it does not hold enough physical assets to back their tokens. While Tether released a report in June that detailed a third-party audit of their holdings, the prevailing sentiment points towards a lack of trust towards the company’s activity, leaving an opening in the market for emerging players.
While the space is quickly becoming more crowded, several coins stand out, including TrueUSD (TUSD), a U.S. dollar pegged stablecoin being developed by TrustToken. The project is backed by Andreessen Horowitz and BlockTower Capital, and has partnered with law firm Cohen & Company to provide bi-monthly attestations of its holdings.
The most recent examination took place on July 16, showing that the TrueUSD funds contained a balance of $79,051,658.66
The latest attestation of TrueUSD funds is now available, showing the underlying assets collateralizing TrueUSD https://t.co/x2LpABjwW5
— TrustToken (@TrustToken) July 18, 2018
Tory Reiss, VP of Corporate Development & Product Strategy at TrustToken, shared his thoughts on the underlying driver of the TrustTroken platform.
We’re building a platform for asset tokenization. When you break it down, it’s a series of both legal and technical protocols because trading real-world assets on the blockchain is not just a technical problem. A huge part of it is figuring out how you custodian those assets and legally protect token holders, which I believe was largely absent in the early days of Tether. We’re trying to have something that is fully transparent and compliant on day one.
TrustToken is starting with currencies and commodities, including an upcoming gold-backed token TrueGold, given that both don’t qualify as securities. However, the company plans to quickly move towards registered securities offerings and other asset categories, according to Reiss.
There’s a reason you hear a lot about real estate, we’re definitely interested in real estate. However, we’re also interested in some less sexy areas, like mortgage-backed securities and income products.
Reiss also cited new and emerging tokenization strategies including company revenue, as exemplified by stationless bike and scooter startup Spin, which is planning to stage a Security Token Offering (STO) to raise $125 million. This STO will raise money from accredited investors, who will, in turn, be entitled to a portion of the company’s revenue.
Just last month, TrustToken closed a $20 million venture round led by Andreessen Horowitz’s new cryptocurrency fund. This came only months after the company closed a seed round of $1.7 million, and it shows no sign of slowing. TrustToken is currently planning yet another fundraising round, but this time it has decided to forego traditional venture capital.
TrustToken has become the sixth company to raise money from accredited investors on CoinList, an AngelList spin-off platform for digital asset companies to manage their token sales and for investors to discover high-quality projects. The current offering is has a hard cap of $61 million allocated over three tranches priced at $0.12, $0.14 and $0.16 per TrustToken (TRU).
TrustToken’s TrueUSD is currently listed for trading on Binance, Bittrex, Upbit and HitBTC.
Disclaimer: This article’s author has cryptocurrency holdings that can be tracked here. This article is for informational purposes only and should not be taken as investment advice. Always conduct your own due diligence before making investments.