Hey folks, Raf CEO of TrustToken here. We’re excited to see TUSD integrated as DAI collateral and are here to address the concerns that arose in the discussion below.
We understand your concerns and want to work together to address them. We believe onboarding TUSD as collateral for DAI is mutually beneficial, and we can commit to changes or compromises to make this integration secure, easy, and reliable.
Where additional collateral types help keep DAI stable, the addition of TUSD, a 1:1 dollar-backed, live-attested stablecoin, would allow users to borrow DAI using TUSD and keep DAI’s value closer to $1.
In addition, there is a high supply of TUSD available to borrow in protocols such as Aave, which users could use to mint DAI.
Responding to Points in “TUSD Update: Concerns surrounding the TUSD Collateral Type”
Concern 1: Deposit Address
The only way for a deposit address to be registered is through our Deposit Address Registrar. The adapter will never be marked as a deposit address, since the only key that writes deposit addresses is the Autosweep Registrar. We never manually declare addresses as deposit addresses.
Additionally, note that for any of the fiat-backed stablecoins, if their private keys were to be fully compromised, the attacker could upgrade the contract arbitrarily and cause arbitrary behavior. The best defense, under current best practices, is to use a multisig.
Concern 2: Private Keys
Currently, the ability to upgrade the TrueUSD implementation is governed by a multisig located at 0x285d362e41ccc116192a17d21a87f41fc26d32f9. We are working on doing the same for the registry key. To mitigate the risk of a single point of failure, we are working on moving all of our important keys to a multisig setup.
If you examine our competitors’ proxies, you’ll see that they are often more opaque than ours and/or have a single key, instead of a multisig, that can unilaterally upgrade the implemetation.
Concern 3: Freezing Funds
A blacklist function is critical to TrustToken’s regulatory & legal compliance. Every compliant stablecoin will have such a feature, easily discoverable in the smart contracts of two existing DAI collateral types. In 2020 alone, USDC froze $100k by law enforcement request, and Tether froze 40 addresses containing millions of dollars in aggregate. TrustToken has a strong terms of service which prevent the arbitrary freezing of funds.
Concern 4: Upgradeability/Diminishing Returns
TrueUSD has gone through several audits and we are fully confident in the security of our contracts. If it is necessary to help onboard TUSD to Maker, we can go through a simplification process for our contracts to implement a more standard pattern for our token.
How TrustToken Can Adapt to Maker’s Concerns
In order to help address the Maker community’s concerns, we’re willing to offer the following:
Technical Change: Simplifying Code Reviews
- Pre-scheduling code reviews: We are willing to commit to give Maker 14 days to review any new implementations, plus time for a vote before we make any future upgrades.
- Simplifying TUSD Code: It may be possible to simplify the TUSD contract by removing extraneous features (i.e. AutoSweep) and moving TrueRewards to a separate smart contract. We could agree on a maximum TUSD code size that the Maker community feels comfortable with, for example 800 LOC.
- Rollback: If necessary, we can downgrade the TUSD smart contract to the previous implementation, as originally approved by Maker.
Supporting Maker: Stabilizing DAI Peg with TUSD
- Market making DAI: If TUSD is added as a collateral to Maker, TrustToken is able to commit $1mm TUSD as collateral to borrow DAI and sell into the market to help steady the DAI peg.
In summary, we take your concerns seriously and we’re prepared to act on them to help TUSD improve the stability, reliability, and transparency of DAI.
Let me conclude by asking: Would the technical changes described here make the maker community comfortable with TUSD as collateral? If so, we’ll proceed with them. If not, please let us know what we’d need to do to make the community comfortable with TUSD as collateral.