Organizing the development history of TUSD: Reintroducing this rising star in Binance.
Original author: 0x26
Original editor: Jack
In June 2023, with another round of issuance, the supply of TUSD (TrueUSD) has exceeded 3 billion, approaching the market value of BUSD, and becoming the 5th largest stablecoin. In 2023, the supply of TUSD has grown by over 200%, making it the only stablecoin that has seen rapid growth during the bear market of cryptocurrency.
Due to different coordinate systems, the chart only represents trends. Data source: glassnode
It seems that everyone in the industry knows that TUSD's flourishing in the bear market is thanks to Binance's promotion. Looking back at the development history of TUSD, we can see that TUSD, which seems to "get up early and catch up with the latecomers," has a different experience from most centralized stablecoins, including the mysterious departure of the co-founder and CEO of TrustToken and the change of ownership of the company, as well as the original team launching the uncollateralized lending protocol TrueFi and issuing coins, and so on.
It seems that TUSD has become Binance's new "designated" stablecoin. But why did Binance choose TUSD, and who is the actual controller and beneficiary of TUSD now? How will Binance prevent TUSD from becoming the next BUSD? With these questions in mind, we have conducted a detailed review of the history of TUSD, tracing the entire development story of TUSD through various clues.
Who is Techteryx? The Secret of TUSD
Looking back at the past six years from 2018 to 2023, after experiencing the initial glory, the mid-term decline, and the subsequent change of ownership and going with the flow, TUSD has become what it is today.
Born with a Golden Key
Although it had a relatively weak presence during DeFi Summer, in reality, TUSD (TrueUSD) issued by TrustToken was launched earlier than USDC (USD Coin), USDP (Pax Dollar), and BUSD. According to the official website, TUSD was launched in April 2018, making it the first regulated-operated USD stablecoin.
2018When TrustToken was founded, it received a total of $20 million in investments, including a16z and Founders Fund, which have experienced bear and bull markets, well-known Chinese institution GGV Capital, as well as market-famous market-making institutions Jump Trading Capital and BlockTower Capital. There were also once popular in the cryptocurrency industry Danhua Capital and ZhenFund. Even in its early years, its issuance exceeded $200 million. However, in January 2020, the issuance decreased to about $150 million, surpassed by USDC's $500 million and USDP's $200 million. Although born with a golden key and quickly listed on mainstream exchanges such as Binance, Bittrex, and Upbit, early on, TUSD was not successful when evaluated based on issuance, number of trading pairs, and trading volume. Mysterious Change in Ownership According to LinkedIn profile, Jai An, the co-founder and CEO of TrustToken, left the company in July 2020. Since then, he has not updated his profile and it is hard to find information about the former CEO of TUSD on various online platforms. Coincidentally, starting in July 2020, TUSD, which had not been increasing issuance for a long time, began issuing more frequently, and soon the issuance broke the previous record, reaching $500 million.
Data Source: glassnode
TrustToken officially announced in December 2020 that it would transfer ownership of TUSD to the Asian consortium Techteryx. TUSD will have independent financial and operational resources separate from TrustToken Inc, while the TrustToken team will continue to manage product operations, compliance, and banking relationships. TUSD will continue to exist on the Ethereum blockchain and support the Binance blockchain, and will soon be natively introduced to Tron and other chains.
This means that the formal handover has been completed.
Another co-founder and CTO Rafael Cosman became CEO of TrustToken in the announcement and continued until the Archblock era. At the same time, TUSD's official Medium account has been moved to a new account, and all the articles previously released by TUSD have now been preserved in the TrueFi account, which is why clicking on some early announcements will redirect to the TrueFi page.
It is from this point on that the mysterious nature of the Asian consortium Techteryx and the true owner of TUSD became confusing.
After TUSD announced the change of ownership, it sparked intense discussions within the Makerdao community about the risks of TUSD, where we received "very detailed invalid information" from the official source. Techteryx is a large joint venture based in Hong Kong, Singapore, Guangzhou, Shenzhen, and Beijing, led by Jennifer Jiang (the largest owner), who has a deep background in traditional industries and has led the acquisition of more than a dozen companies...This answer can easily confuse people. In further inquiries, community members stated that no information about Techteryx Company was found in the mentioned areas. The only information found about Jennifer Jiang is that she is the CEO of a blockchain company in Boston and has published papers on blockchain consensus mechanisms. However, the TUSD officials who posted the above information did not provide an answer to this.
Interestingly, for many players, the question of who is behind TUSD has become a "public secret" in the crypto community.
When we say "public secret," it is because although Techteryx and the person giving orders are good at hiding themselves, large-scale onchain data cannot be deceived. Based on the current onchain data, the answer seems to be more obvious.
1) Not only during DeFi Summer did TUSD's use cases mostly come from Tron. According to official data, TUSD's circulation on the Tron chain is about 2.37 billion USD, accounting for about 76% of the total circulation, while its circulation on the Ethereum chain is about 730 million USD, accounting for about 23% of the total.
As of June 2023, the main circulation data displayed on the TUSD official website
2) Moreover, previously when ZachXBT publicly raised funds due to the lawsuit of Huang Licheng, only 3 users donated TUSD, and Justin Sun was not only the first among them, but also the user with the largest donation among the 3 people.
Justin Sun donated 10,000 TUSD from his address, source: DeBank
3) In addition, Justin Sun transferred more than 56 million TUSD to Binance during the LaunchPool period on Binance SUI, which led to a warning from CZ.
With a combination of the above clues, we seem to be able to find some answers to the question of who the actual owners of TUSD are. Why is this called a secret?
Firstly, on paper, TUSD has always belonged to Techteryx, and Jennifer Jiang has not come forward in public media to explain this matter. There have also been no public statements from Techteryx staff indicating any connection between TUSD and Justin Sun.
Furthermore, Adam Cochran (@adamscochran) previously summarized the situation regarding TUSD, stating, "Justin Sun's conglomerate purchased TrueUSD but still pays management fees to the original US owners. Then it moved to an offshore bank, and now with the increase in market value, control of the private key has also been transferred, but there is no concrete evidence to support this...”
Adam is like the little boy in "The Emperor's New Clothes," saying what many people want to say. However, the subsequent development of events is quite different from a fairy tale. He received a warning from the official TUSD:
1) TrueUSD has never belonged to Justin Sun;
2) We reserve the right to seek legal remedies for your defamation.
The "debunking" from the official source and the lawyer's warning further distance Justin Sun from TUSD in the public eye and legal realm. The ownership of TUSD continues to be a "secret that shouldn't be revealed".
In response to a tweet about "but they just won't admit it," Adam stated that when taking over a business worth over $1 billion, most legitimate business groups want the public to know who they are - rather than hiding it.
Crypto has always been the Wild West, and under various internal and external factors, it is common for many Chinese companies to use offshore companies, "white gloves," and outsourcing companies. Just like how Justin Sun is currently just an advisor to Huobi.
TUSD and TureFi, brothers of the same origin but different species
In fact, CZ has already clarified that TrueFi has nothing to do with TUSD. However, by clarifying the timeline of events related to TrueFi, we can better understand the relationship between the original team of TUSD, investors, and the acquiring party Techteryx:
In 2018, TrustToken received a total of $20 million in investments from institutions such as a16z, BlockTower, and Jump;
In July 2020, TrustToken had a transaction that appeared to transfer ownership, and the original CEO resigned;
On November 6, 2020, TrustToken launched its first unsecured lending protocol, TrueFi, with TUSD as the main loan use case;
In December, TrustToken officially announced the transfer of TUSD ownership.
In August 2021, TrustToekn announced a $12.5 million financing through the sale of the native token TRU, led by Blocktower with participation from a16z and Alameda Research.
In March 2022, TrustToken added two senior executives, Wall Street veteran Bill Wolf and senior product manager Ryan Christensen, who respectively assumed the positions of Chief Investment Officer and Chief Product Officer;
In September of the same year, TrustToken was renamed Archblock, with Ryan Christensen, who joined earlier, promoted to CEO. Former CEO Rafael Cosman became a board member and advisor, and founded the AI company Protogon Research in 2023.
Combining the timeline above, it is clear that TUSD and TrueFi have been related from the beginning but belong to different entities. From the sale of TUSD ownership by the TrustToken team, to the establishment of TureFi based on TUSD and fundraising, to the creation of a new company, and even the introduction of well-regarded executives possibly for the founder's exit. A series of hidden and delicate chain of operations is truly remarkable. Without careful analysis, it is difficult to discern the relationship between the two parties. This is likely the reason why every time before, TUSD issuance will trigger a sharp rise in TrueFi token TRU. Binance, why choose TUSD? Binance is an early supporter of TUSD, planning to launch TUSD in May 2018, along with BTC, ETH, and BNB trading pairs. However, perhaps due to liquidity concerns, Binance ultimately delayed the listing of TUSD for 4 days. Subsequently, throughout most of 2019, Binance gradually listed some TUSD trading pairs for high market cap and well-liquid projects. But at this time, Binance may still be in the process of finding a reliable stablecoin, as they listed not only TUSD but also USDC and PAX.Although the announcement mentions multiple stablecoins, TUSD is not unique among them. To fully understand the changing relationship between Binance and TUSD, we have collected English announcements related to TUSD released by Binance. TUSD's "good days" on Binance temporarily came to an end in October 2019. Since then, Binance has almost no new TUSD trading pairs. From April to October 2020, for a period of 7 months, TUSD only had announcements of being delisted from trading pairs on Binance. After that, TUSD became the least prominent stablecoin on Binance. Until 2022, Binance continued to delist TUSD trading pairs. In contrast to the continuous decline of TUSD, there is Binance USD (BUSD), a US dollar-backed stablecoin launched by Binance and cryptocurrency financial institution Paxos Trust Co. in September 2019. BUSD's circulation exceeded that of TUSD in early 2020, and in September, it surpassed PAX's USDP with the help of BSC (now BNB Chain), leaving it far behind. During its peak, Binance followed FTX's strategy of automatically converting USDC, USDP, and TUSD to BUSD, achieving the dominance of compliant stablecoins on Binance. It can be said that at that time, the centralized stablecoins that everyone recognized were only USDT, USDC, and BUSD. Starting from September 2020, the market share of BUSD represented by blue has been rapidly increasing, data source: Coin Metrics However, on February 13, 2023, the New York Department of Financial Services (NYDFS) ordered Paxos to stop issuing more BUSD. The fate of TUSD took a turn. NYDFS emphasized that Paxos is authorized to issue BUSD on the Ethereum blockchain, but the department has not authorized Binance-Peg BUSD on any blockchain. Paxos responded that as of February 21, Paxos will stop issuing new BUSD Tokens in accordance with NYDFS's instructions and work closely with them. BUSD will continue to receive full support from Paxos and can be redeemed until at least February 2024. Subsequently, the once highly valued BUSD with a market capitalization of up to 22 billion US dollars gradually exited the stage of history. Related reading: "The Rise and Fall of a $15 Billion Stablecoin Empire: The Ambition and Regret of BUSD" At that time, no one would have thought that Binance would choose TUSD. At that time, the market capitalization of USDT was 69 billion US dollars, USDC was 41 billion US dollars, and MakerDAO's DAI was 5 billion US dollars. The market capitalization of TUSD was only 900 million US dollars, even less than the 1 billion US dollars of Frax Finance's native stablecoin FRAX. But having a smaller supply seemed to be the most easily solved problem for Binance. Starting from September 2019, TUSD began to be "shut out" by Binance, and from September 2022 to March 2023, it even completely disappeared from Binance's announcements. Over the course of five years, Binance only issued 62 announcements for TUSD. From March to June 2023, Binance released 41 announcements related to TUSD within a 3-month period. Since then, the circulating market value of TUSD has increased by 220%.
What did Binance do after choosing TUSD? In order to protect their rights and the interests of BUSD holders, Binance first chose to increase the spot trading pairs for stablecoins on March 11th, offering fee discounts and halting automatic conversions of stablecoins. Additionally, trading pairs for BNB, ETH, and TUSD were made commission-free. One notable detail in the announcement is that the window for automatic conversion of BUSD to TUSD was extended by nearly 2 weeks compared to USDC and USDP, indicating the varying degrees of closeness in their relationship.
Furthermore, Binance will also add TUSD trading pairs for popular trading coins and enable isolated margin trading for some TUSD pairs. For example, on March 31st, RDNT, which was listed in Binance Innovation Zone, had three trading pairs: BTC, USDT, and TUSD.
If the above strategies were just appetizers, the launch of TUSD Pool on Launchpool and commission-free trading for BTC/TUSD can be considered as Binance's grand feast for TUSD. It's worth noting that previously, Launchpool only featured BNB and BUSD, but starting from March, all Launchpools on Binance only include BNB and TUSD. This demonstrates the significance of TUSD on Binance.
On March 15th, Binance announced the end of zero-fee trading for BTC on various trading pairs, with only BTC/TUSD enjoying the privilege of zero fees for both limit and market orders. This significant incentive led the BTC/TUSD trading pair to surpass BTC/USDT and become the highest trading volume pair on Binance.
Concerns about TUSD: Although Binance supports TUSD, its foundation remains somewhat unstable. Without the support of Binance Launchpool, the exchange rate of TUSD against USDT has been consistently negative. Moreover, it often experiences detachment in the Curve pool, specifically in 3 Pool and [missing content].TUSD occupies nearly 70% of the liquidity pool. TUSD's share in the Curve 3 Pool/TUSD liquidity pool is heavily skewed. Apart from the Tron and Ethereum chains, TUSD has very little issuance. Aside from previous usage on TruFi and USDD, there aren't many use cases for TUSD, which is now struggling. Although Binance has launched zero maker fees for TUSD, the trading volume for other trading pairs, except for BTC, is dismal. Even with zero maker fees for ETH/TUSD trading pair, the trading volume is still much lower than that of USDT. Outside of Binance, there is even less support for TUSD trading pairs on other trading platforms. OKX does not have any TUSD trading pairs, and Huobi has only listed USDT and USDD trading pairs. Not only is there a lack of use cases, but the community also sees the issue of the over $3 billion USD reserve for TUSD. TUSD has always claimed that Chainlink provides Proof of Reserves for TUSD, but the displayed data from Chainlink is obtained from a company called The Network Firm, which conducts regular audits of TrustToken's custodial bank accounts. It is worth noting that some members of The Network Firm previously came from Armanino, which audited FTX in 2020 and 2021. Additionally, the previous proof of reserves for TUSD was also Armanino Audit。 Not only in terms of reserve data proof, Prime Trust, the custodian of TUSD's reserve fund, is also in the midst of a bankruptcy crisis. On June 28th, the Financial Institution Division (FID) of the State of Nevada submitted a petition to the Eighth Judicial District Court of Nevada, requesting the appointment of a receiver to take over the day-to-day operations of the cryptocurrency custodian Prime Trust and examine its financial condition. According to the FID filing, Prime Trust had lost access to the old wallets as early as 2021 and used customer assets to repurchase cryptocurrencies. Even the official TUSD has repeatedly announced the suspension of minting through Prime Trust via different channels. Even with multiple hidden dangers, why did Binance still choose TUSD? Regulatory issues are an unavoidable factor. By reviewing the development history of BUSD, we may find some clues. In September 2019, Binance chose to cooperate with Paxos, an experienced entity that plays the role of issuing BUSD on Ethereum, with BUSD being the ERC-20 Token issued on Ethereum, and the reserve fund of BUSD is stored in Paxos's US bank account. However, with BSC's rise and fall (now BNB Chain), one reason for the regulatory accusations against BUSD emerged. Paxos obtained authorization from NYDFS to issue BUSD, but it was only limited to Ethereum. BUSD issued on the BSC chain is an entirely different matter. Although Binance's cooperation with Paxos for BUSD is well known, as early as June of that same year, Binance announced a partnership with TrustToken. Then-CEO Jai An stated that Binance users could seamlessly mint and redeem TUSD. The collaboration with Binance would make it easier for users to enter and exit the cryptocurrency market. It is worth knowing that the circulation of TUSD in June 2019 was higher than that of PAX. Although it is unknown why Binance ultimately chose Paxos, it can be said that the relationship between Binance and TUSD began at that time. Not to mention the "Asian lineage" that TUSD now possesses, which seems to be extremely compatible with Binance. As for Binance, which currently sits firmly in the industry's top spot, it did not choose to enter the market with high-profile after the lessons learned from BUSD. Although there were previous challenges from USDC and BUSD supported by Binance, they are now in the past, and USDT continues to maintain its dominant position in the centralized stablecoin field. In terms of liquidity, trading volume, and trading pairs, USDT demonstrates overwhelming dominance. Its parent company, Tether, had a net profit of $1.48 billion in the first quarter of 2023 alone. USDT, securely positioned as the leader, not only does not need assistance but also has been fined multiple times by regulatory agencies due to its opaque reserve issue, which has been criticized by many. Previously, it was unable to automatically exchange with compliant stablecoins on many trading platforms. Thanks to FTX and DeFi, USDC (Circle) achieved significant development during the previous bull market. Not only did it secure the position as the second-largest stablecoin, but it also raised a total of $400 million in funding from major US traditional financial institutions such as BlackRock and Fidelity in 2021. However, whether it's the close relationship with FTX as minor shareholders or the previous Bloomberg report that Circle had reported rumors to NYDFS in 2022 about "Binance's insufficient reserves to support assets such as BUSD," along with Binance US facing obstacles in the US, Binance may have concerns about widespread adoption of USDC. On the other hand, TUSD, whether it's due to its "Asian lineage," long history, compliance level, or infrastructure development, stands out among the existing options. In addition, the relationship between Binance and Tron is not as bad as many imagine. Tron not only conducted an ICO on Binance in the past but also, after experiencing regulation, in 2019, Binance relaunched Launchpad to create a strong money-making effect that ignited the market. Since announcing the relaunch of Launchpad, the price of BNB has skyrocketed from $6 to nearly $40, a rise of over 500%. The first project on Launchpad at that time was BitTorrent, which was acquired by Tron founder Justin Sun in 2018. Importantly, under heavy regulatory pressure, Binance may need to have a trustworthy and compliant third-party perspective."Stable" stablecoin partner. References: A16z Leads Investors in $20 Million Token Presale for Crypto Assets Platform Scaling Trust: Announcing TUSD's Next Stage of Growth Cryptocurrency Stablecoin TrustToken Raises $12.5 Million What is TrueUSD (TUSD)? Overview & FAQ TrustToken Partners with Binance to Enable Easier Access to Stablecoins TrueUSD Integrates with Signature Bank's Blockchain-based Payments Platform, Signet TrustToken Rebrands as Archblock, to Modernize Global Financial Infrastructure Under New Leadership What's up with TrueUSD and the rest of TrustToken's stablecoins? In-depth investigation | How did Tron become a marketing-oriented public chain?
Turning Point
Why TUSD?
