US Dollar Pegged Stablecoin Carbon USD Deployed On EOS Network
On 9 November 2018, a blockchain startup based in New York called Carbon-12 Labs (also called as “Carbon”), which is creating a stablecoin called CarbonUSD (CUSD), declared that CUSD is accessible on the EOS network.
Carbon was initially unleashed the Ethereum Platform on 12 September 2018 by Samuel Trautwein (CEO), Connor Linn, Gavin Mai (CPO) and Miles Albert (CSO). CarbonUSD is a fully-collateralized price-stable cryptocurrency pegged to the US dollars on a 1:1 ratio. The greenback is held in FDIC-insured accounts.
In any case, according to Sam Trautwein, the company’s CEO, the long- term arrangement is to shift to a “fiat-backed algorithmic hybrid approach” after “CarbonUSD reaches sufficient scale as a fully fiat-backed token.” Trautwein further elaborates:
“While redeemable, fiat-backed tokens are generally trusted on day 0, they are intrinsically unscalable. Structurally these tokens are multi party bearer receipts meaning that their soundness depends not on a single fail point, but rather usually four to five. If the auditor, the bank, the trust company, the smart contract auditor, or the software provider fails (in any sense of the word), the entire structure comes tumbling down. As the stablecoin scales it undergoes significant strain. They draw increased regulatory scrutiny meaning that small things that were once overlooked now will draw the ire of governing bodies. In many ways Tether outscaled its compliance. They lost their ability to withdraw and deposit through Wells Fargo overnight. It’s difficult to build a new paradigm within the old paradigm.”
“Combining the two presents the best route forward. We offer the optimal consumer product today and tomorrow. The transition will be gradual and transparent as we will leave the infrastructure in place for users to keep using fiat-backed solutions if they so desire.”
On 9 November Carbon declared the launch of CarbonUSD on the EOS network. Trautwein clarified in a blog post published on 10 November that “Carbon’s interoperability solution empowers CarbonUSD clients to transfer their tokens to the EOS blockchain, where clients can exchange CarbonUSD at even lower fees and quicker than Ethereum.”
“We are honored and excited to be the first stablecoin on EOS and to play such a crucial role in such a burgeoning ecosystem. Stablecoins are critical infrastructure for value and we think providing this to EOS further enhances the ecosystem.”
Trautwein further explained how deposits/withdrawals work
“To create new CarbonUSD tokens, users can make fiat deposits with the company’s partner bank, Nevada-based Prime Trust. Frequent third-party attestations by leading auditor Cohen & Co. verify publicly that each token is backed 1-to-1 by escrowed funds in a trust account.”
Sam Kazemian, Co-Founder and President of Everipedia (an EOS DApp that claims to be “the world’s largest encyclopedia on the blockchain”), said
“Stablecoins, as an asset class, are the next big thing in crypto and will lead to a new bull market in the next 6–18 months. Carbon’s unique hybrid approach for gaining stablecoin adoption is the most promising I know of. There’s no other project like it”.