[GUSD] MIP6 Collateral Onboarding Application

[GUSD] MIP6 Collateral Onboarding Application for Gemini USD Token

  1. Who is the interested party for this collateral application?

@monet-supply

  1. Provide a brief high-level overview of the project, with a focus on the applying collateral token.

GUSD is a fully collateralized USD stablecoin operating on the Ethereum network. GUSD is issued by Gemini Trust Company, LLC, and fiat funds are held by State Street Bank and Trust Co (NYSE:STT).

  1. Provide a brief history of the project.

Gemini was founded by the Winklevoss brothers in 2013, initially focusing on the exchange business. They have since expanded into general custody services as well as stablecoin issuance. The Gemini USD was launched in September 2018 and for a time was one of the largest stablecoins with over $100M circulating at its peak. The circulating supply of GUSD has since declined as it was dwarfed by USDC, USDT and other stablecoins with wider trading and defi usage. The supply of GUSD is currently ~$11M, having grown from a trough of ~$4M at the end of 2019.

  1. Link the whitepaper, documentation portals, and source code for the system(s) that interact with the proposed collateral, and all relevant Ethereum addresses. If the system is complex, schematic(s) are especially appreciated.

Whitepaper: https://gemini.com/static/dollar/gemini-dollar-whitepaper.pdf

Website: https://gemini.com/dollar

Source Code: https://github.com/gemini/dollar

GUSD token contract: https://etherscan.io/token/0x056fd409e1d7a124bd7017459dfea2f387b6d5cd

  1. Link any available audits of the project. Both procedural and smart contract focused audits.

Accountant’s reports at bottom of page: https://gemini.com/dollar#reports

Trail of bits contract audit: https://gemini.com/static/dollar/gemini-dollar-trailofbits-audit.pdf

  1. Link to any active communities relating to your project.

Twitter: https://twitter.com/Gemini

  1. How is the applying collateral type currently used?

GUSD is used to make USD transfers and other transactions on the Ethereum network. GUSD can be redeemed for USD via Gemini exchange accounts. GUSD is also accepted for deposits and lending via BlockFi.

  1. Does one organization bear legal responsibility for the collateral? What jurisdiction does that organization reside in?

GUSD is issued by Gemini Trust Company, LLC, a New York state based trust company. The fiat USD corresponding to issued GUSD is held by State Street Bank and Trust Company (NYSE:STT). Monthly accounting examinations are performed by BPM, LLP.

  1. Where does exchange for the asset occur?

GUSD can be exchanged for USD at a fixed 1:1 rate on the Gemini exchange. GUSD also has a few trading pairs on other centralized exchanges such as OKEx, HitBTC, and ZB.

  1. (Optional) Has your project obtained any legal opinions or memoranda regarding the regulatory standing of the token or an explanation of the same from the perspective of any jurisdiction? If so, those materials should be provided for community review.

I am not aware of any publicly available legal opinions addressing the project or token’s regulatory standing.

  1. (Optional) Describe whether there are any regulatory registrations for the token and provide related documentation (including an explanation of any past or existing interactions with any regulatory authorities, regardless of jurisdiction), if applicable.

Gemini Trust Company, LLC received authorization from the New York DFS to issue GUSD before operations began in 2018. Press release here: https://www.dfs.ny.gov/reports_and_publications/press_releases/pr1809101

  1. (Optional) List any possible oracle data sources for the proposed Collateral type.

The GUSD oracle price could be pegged to $1 similarly to the current USDC oracle.

  1. (Optional) List any parties interested in taking part in liquidations for the proposed Collateral type.

n/a


GUSD has certainly seen better days, with it’s circulating supply off ~90% since its peak. That being said, it has the advantage of having a different issuer and custodian than USDC, TUSD, and the Paxos stablecoins (PAX, HUSD, BUSD). This could help diversify Maker’s credit and custody exposures and reduce overall risk. To avoid a Coinbase dominated USDC monoculture, we should consider dogfooding some competing stablecoins by onboarding them before they have found wide adoption in DeFi.

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All great points. The more diversity, the better. Nothing substantive to add aside from thanking monet-supply for pushing this. That excitement is contagious!

5 Likes

I did a little bit of user testing on GUSD for the hell of it:

  • GUSD withdraw request was sent with fast gas (94 gwei vs 94 gwei ethgasstation fast recommendation)
  • GUSD deposit back into Gemini was credited to USD exchange balance within ~17 blocks (~4 minutes)

Overall I’m pretty impressed with the GUSD creation and redemption process, as well as with Gemini KYC. This might work for keeper liquidity until GUSD is better represented on DEXes.

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Yeah, I think there is a use here. Any chance we could get the Winklevii on a governance call to see if they could commit a million GUSD to a vault and sell on the market, like our TUSD friends?

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I have spoken with a representative of Gemini BD, who confirmed Gemini currently has no plans to upgrade their token contract implementation.

I have also submitted initial onboarding proposals to Curve, Compound, and Aave. If these proposals gain support as well the liquidity and usability for GUSD could increase considerably.

9 Likes

@monet-supply thank you for bringing this proposal up for vote in a thoughtful and detailed manner. Since inception, crypto, and DeFI especially, have been, and probably will continue to be, a Main Street (not Wall Street) phenomenon for some time. That being said, there will come a day when financial institutions (the largest money by an order of magnitude) will be ready to enter the DeFi market and when that day comes, they will need bridges into this ecosystem that are completely buttoned-up.

In that vein, I think it is important to emphasize two additional points about GUSD: 1) GUSD is a regulator-approved stablecoin (by the NYDFS), whereas as far as I know, USDC has actually NOT received regulatory approval (by either NYDFS or any other US regulator). 2) GUSD publishes the names of the financial institutions (State Street, Goldman Sachs, etc.) that hold the USD that correspond to GUSD, whereas as far as I know, USDC or PAX do not tell you where your dollars are being held.

These details may not be material to your average crypto user or early adopter today, however, they will be with respect to financial institutions and their true adoption/participation in the future. As I hope I’ve made the case, GUSD is uniquely able to meet the rigorous compliance and regulatory requirements of future participants, including financial institutions, looking to make the jump into crypto and DeFi. Giving users greater choice with respect to collateral types (such as adding a fully-regulated stablecoin like GUSD) will improve both the number of new participants and long-term adoption of crypto and DeFi.

Thanks everyone for your consideration and let me know if you have any other questions.

Onward and Upward,

Tyler

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@tylerwinklevoss Hello Tyler, Thank you for stopping by our community forum. Assuming this is really you-- can a GUSD address get blacklisted? Sorry about the simplicity of the question, but I did not read the whitepaper–will do soon, eventually.

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Happy to jump on a governance call.

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Governance calls are on Thursday’s at 1600 UTC. @LongForWisdom sets the agenda. Feel free to ping him for a date that works for you and we can discuss onboarding GUSD :smiley:

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@tylerwinklevoss @Jtathmann , we actually have collateral calls now specifically to discuss potential collateral types. I’d suggest that venue is more appropriate for discussion of GUSD.

There is a sign-up thread here: Collateral Calls - Calling all Projects!, the next one of these is scheduled for September 9th, but I believe the slots have already been filled. There’s probably a good chance to get on the next one (23rd). First thing to do @tylerwinklevoss would be to comment on the linked thread and register your interest.

(As a sidenote, I feel slightly bad pushing @tylerwinklevoss to the other call but realistically if it was anyone else I’d do the same thing. So y’know, treating all applicants equally and all that.)

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Yeah, that would probably be a better venue. We will just have to advertise to the community so they can bring their technical questions

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Sounds good, I’ll comment on linked thread now. Thanks!

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Woah, can’t wait to have @tylerwinklevoss on a community call. Guess Maker is moving up.

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Can’t wait to join! :wink:

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Worth mentioning, the Curve GUSD pool is now live!

It’s possible to trade about $100,000 GUSD to or from DAI with only ~3 basis points (0.03%) of slippage. For a $1,000,000 trade, slippage is around ~40 basis points (0.4%). Definitely a big improvement in on-chain liquidity since when this application was originally submitted.

3 Likes