Gemini Dollar Introduction
The Gemini Dollar stablecoin (GUSD) is one of the most recent stablecoins to be released on the market. The coin was issued on September 10, 2018, by the Gemini cryptocurrency exchange, which is led by the Winklevoss twins. It is an ERC-20 token built on the Ethereum blockchain and according to its whitepaper, it is designed to be “strictly pegged 1:1 to the U.S. dollar.”
Because its value is tied to the U.S. dollar, Gemini is required to use a State Street bank to hold the USD assets and has received FDIC insurance within specific limits for their product.
What makes this stablecoin unique is that it will be regularly independently audited by BPM Accounting and Consulting. The audits will have the role of ensuring that Gemini is holding the equivalent amount of U.S. dollars for its GUSD holdings, and the results of each audit will be made public.
Because Gemini Dollars are issued on the Ethereum blockchain it will always be possible to view the tokens, and how much is in circulation. The USD holdings backing the tokens will be confirmed by the accounting audit, while the blockchain ledger itself will confirm coin supply.
New Gemini Dollars are printed anytime they are withdrawn from the Gemini exchange. They are then destroyed each time they are redeemed or deposited back to the Gemini account.
GUSD keeps all ERC-20 features, meaning they have smart contract functionalities and can be stored on any Ethereum address and in any ERC-20 compatible wallet.
Technologies and Architecture
Stablecoins have been created to offer an alternative to fiat currencies as many crypto exchanges do not support USD conversion. This leads to an increase in trading volumes for stablecoins on these platforms. Gemini developed the GUSD with strict controls over the token so they can upgrade it whenever necessary.
The token’s design features layers of smart contracts which perform various functions. The “Proxy” layer manages the creation and transfer of coins and acts as a mechanism that stops coin issuance plus transfers if there are any security or legal issues. The Proxy layer is the governance layer, which manages blockchain activity and enables smart contract logic in the following “Impl” to be executed.
The “Impl” layer stores the data and logic for the smart contracts. Here is where the logic for token creation, destruction, and transfer is kept. The logic featured on this layer presents similarities to ERC-20 tokens, but the difference here is that the contracts only work when they receive permission from the Proxy layer.
The last layer is the “Store”, which is the actual ledger, where balances are mapped to their owners. It is also where coin transactions are displayed on the blockchain for public viewing.
This architecture is similar to how a local server works to “serve up” network resources. The Proxy layer is the local server itself which handles file execution. The actual files represent the Impl layer, and the Store layer is the database.
Where can I purchase Gemini Dollars?
GUSD is currently listed on 19 exchanges, including OKEx, Bibox, and HitBTC. Bibox currently has the highest trading volume per day, which is of 86.6%. The coin is traded mostly against BTC, ETH, and USDT.
As it is stated in its whitepaper, GUSD does have some centralized features. The founder of another stablecoin called Stable Unit reviewed the code for GUSD and discovered that Gemini’s implementation allows it to issue an infinite number of tokens, freeze accounts, and make tokens non-transferable. Also, custodians are able to change token implementation every 48 hours.
Although this level of control might be of some concern, this centralized model is used to protect users from security incidents.
The Gemini exchange invested considerable development into the Gemini Dollar before its launch. Seeing as more stablecoins have recently been released, it is difficult to determine if GUSD will surpass its competitors and start dominating Tether’s market share.
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