TUSD is undergoing a material change to its ownership structure. Is there a process for reducing exposure in the event of a material change?

The team behind TUSD announced that ownership of the token will be transferred to another entity:

Today, we’re proud to announce TUSD will enter the next stage of its growth. Ownership of TUSD will be moving over to an Asia-based consortium that will be working with TRON to develop TUSD on Ethereum, TRON, and other blockchain networks.

The TUSD contracts are upgradeable, and this new (and seemingly unknown) entity will be able to update the token at will. Because of this, I would imagine that parts (or all) of the risk analysis previously done on TUSD will be nullified.

In this case, is there a procedure to re-evaluate the asset? Alternatively, would it be more prudent to reduce the exposure of it?

Edit: the language in this post has been updated from “remove vault” to “reduce exposure”.

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He’s talking about TUSD not USDT.

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I think we might be commingling assets here. I was referring to TUSD and you mentioned USDT. You are correct that USDT has a little more than 1,000 locked in vaults, however, TUSD has 52,729,891.08 locked.

This may have been your intention, so please let me know if so!

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Oh darn my bad! :sweat_smile:

Assuming you wanted to reduce your exposure, I think at this point you would be looking to: set the DC to some number you are now comfortable with, turn on liquidations for that particular vault type, set the SF to something high, and potentially increase the LR as much as you had room to.

Once you had done that you would basically be waiting for people to close out their positions or get liquidated as they accrue interest.

All of that is to say, i think something can be done. It is just a matter of should it.

As far as process goes i think it should start with some sort of signaling request to see if the community wants to decrease its exposure and to what level.

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I would expect the new owners of TUSD to reach out to us (or maybe even the old owners since they applied [TUSD] - Adding as collateral to MCD (Second Application) ) so uncertainties can be solved. Reducing the DC to 0 as a direct action seems not unreasonable to me… We already have quite an exposure here which could be seen as worrying…

Hope is not a good strategy, but overreacting clearly neither :wink: liquidations are probably not so easy I guess? We would need keeper support

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Hey folks, Rafael CEO of TrustToken here. Yes, as announced, ownership of TUSD is moving over to an Asia-based consortium that will be working with Tron to develop and grow the product. We believe TUSD is the same strong product you know and (hopefully) love and this shouldn’t require a change to its level of integration in Maker. In fact, given the new ownership of TUSD, I think you might see increased usage in the community, which could benefit everyone.

Additionally, in the interest of full transparency with communities such as Maker, we’ve made this public announcement several weeks in advance of the smart contract ownership moving over. This gives communities like yours time to discuss the changes, ask any questions, and hopefully choose to continue fully supporting TUSD as you have been. Some details:

  1. TrustToken Inc. will continue to manage the operations, compliance, and banking relations of the TUSD product.
  2. There are no smart contract upgrades planned at this time, we’ll let you know if/when we expect any changes and of course will submit the changes for whitelisting in the adapter

I’m available here for any comments and questions. Thank you for the quick response- your job is to keep users safe and our job is to work with you to do so!

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I don’t think this substantially changes the risk of TUSD. Similar to circle, tether, or other stablecoin companies, there will always be inherent systematic risk to non-decentralized stablecoins in the same way there is risk in volatility in other coins.

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This changes things in a big way for me. I don’t trust Justin Sun in the slightest. He’s demonstrated repeatedly his penchant to scam people in the pursuit of money. We need to seriously re-evaluate our risk model around TUSD.

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To answer the title question. No there is not currently a process in place to remove a vault type. The Risk Team could make this kind of call. It could potentially by done via community signal request.

It would maybe make sense to clarify what you mean by ‘remove the vault type’ as well. We can set the debt ceiling to zero easily enough. Force liquidating all the users using that vault type is quite a lot more complicated.

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I don’t think TUSD has much to do with Justin Sun, and that article only mentioned that was Asia-based consortium and will be working with TRON to develop TUSD on Ethereum, TRON, and other blockchain networks. Actually, it sounds not bad in my personal opinion.

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i’m aligned with the thinking that in some ways the risks have changed and in some sense they are the same

using any collateral that is a reference to assets held by an entity could always have the referenced assets or entity shift underneath

plans for all collateral like this should start from the assumption that legal entities will come and go over time

Hello Maker Community, TrueUSD team here. We’re still the same TrueUSD with a more solid investment and resources behind us now.

The TrueUSD team takes transparency, auditing and reserves very seriously. All of these will be dependent on third party attestations, provided by Armanino and on-chain Proof of Reserves with Chainlink. TrueUSD will continue to be one of the top stablecoins in transparency, regulating, and real time auditing.

Like Rafael said above, while ownership of TUSD will be transferred, the original Trust Token team will still be onboard and running the project, and compliance will continue to be managed by the same individuals from TrustToken, Inc. Rafael himself will of course still be here as well!

The product you know and trust will not be changing. The TrustToken team will continue to manage operations, compliance, and banking relations of the TUSD product — only now with further support in customer success, marketing budget, engineering resources, and liquidity.

The new TUSD ownership means more resources to grow and develop TUSD onto more blockchain networks, and with greater global reach. We hope the community will continue to support TUSD, as it will be the same awesome product. For every development and movement, we will share with the community. We’re here, like Rafael, for questions and comments.

We thank everyone for your support, and looking forward to growing TUSD together with TrustToken and the Maker community!

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Can you be more specific about the timeline here? It would be good to know if we need to react to this over the winter holiday or whether it can wait until the new year.

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I have just edited the original post.

The wording should have said “reduce exposure” instead of “remove the vault type”. I can now see how my post came off as more urgent than it needed to be.

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Hey @rafael.cosman thanks for all of your work in the space!

Is it possible to provide more details about the consortium? Specifically, who are the entities involved?

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Hi Rafael, I have two questions:

(1) Will the custody of the USD be changing, or will you continue to use your current Trustee and banking relationships?

(2) Will the Consortium be gaining control over the blacklisting function? If so, are they willing to make a public statement around their intentions?

Follow up: What is the exact date that you’ll be handing over control?

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BlockTower Capital and Danhua Capital, And A16Z
— holdings/stake percentage remains the same? @TrueUSD_Official @rafael.cosman

Also, your statement on the Medium article “ TUSD has become the most transparent stablecoin on the market.” come on man keep it real— we all know it’s DAI. :smiley:

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TUSD would be a great candidate vault for the DC IAM. 82MM seems a bit much DC headroom given the uncertainty atm.

If the same team is managing the banking and smart contracts, and there are still live third-party attestations, then the risk has not changed.

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