New stablecoin deploys 98% of earnings to network participants, challenging industry norms.
Key Takeaways
- BitGo's USDS redistributes up to 98% of earnings to ecosystem participants.
- USDS offers real-time proof-of-reserves and monthly audits for transparency.
BitGo introduced on Sept. 18 the USD Standard (USDS) a new 1:1 USD-backed stablecoin designed to transform the digital asset landscape, which will be launched on January 2025.
The announcement highlighted that USDS aims to challenge the dominance of single issuers like Circle and Tether by prioritizing fairness, transparency, and market neutrality.
USDS introduces a novel reward system that deploys up to 98% of earnings to participants who support the ecosystem. This approach incentivizes all eligible institutions, exchanges, liquidity providers, and users to grow the USDS network, fostering a more inclusive environment.
Notably, this system is already implemented by other stablecoin issuers, such as Sky and its Sky Dollar, whose ticker is the same as USD Standard’s USDS. Through its Savings Rate, Sky provides a fixed yield for users providing liquidity with Sky Dollar.
The USDS is fully backed by short-duration Treasury bills (T-bills), overnight repos, and cash, ensuring high liquidity and low risk. The stablecoin will be issued by BitGo New York Trust Co., a licensed entity that will keep the operation regulatory compliant.
Additionally, BitGo will provide real-time proof-of-reserves published on usdstandard.com, with monthly audits by top-tier accounting firms.
The announcement also pointed out that USDS will be globally accessible to institutions, individuals, and decentralized finance (DeFi) participants, offering easy onramps from USD, USDC, and USDT without conversion fees.
The waitlist is already open for users who want to be eligible to acquire USDS on its launch.
Recent controversy
The offering of a stablecoin by BitGo comes one month after the company declared it would adopt a multi-jurisdictional custody model for its synthetic Bitcoin product, the Wrapped Bitcoin (WBTC).
This movement sparked controversy within the crypto community, as the expansion plan will be boosted by a joint venture with BiT Global, a company backed by Justin Sun, founder of Tron.
Notably, the controversy gained traction after USDD, Tron’s ecosystem native stablecoin, had 12,000 BTC removed from its backing. Therefore, WBTC users were worried that Sun would have access to the asset backings, making him able to change it at his will.
BitGo’s CEO Mike Belshe assured users on Aug. 10 that Sun wouldn’t have the ability to move funds. Yet, protocols such as Sky and Aave decided to lower the exposure cap to WBTC.
