TrueUSD Stablecoin Issuer, Archblock To Use Chainlink’s Proof-Of-Reserves System For Verification
Archblock announced it intends to utilize the Chainlink proof-of-reserves verification system for TrueUSD. As part of the agreement, The Network Firm (TNF) will be responsible for aggregating the oracle data for the TrueUSD stablecoin.
Adopting Chainlink’s Proof-of-Reserves (PoR)
According to the TrueUSD stablecoin issuer, it will use the proof-of-reserves system on the Chainlink network to allow users to verify whether its reserves are entirely collateralized on the blockchain using an automated data platform. Ryan Christensen, the CEO of Archblock, stated that the firm is excited to leverage Chainlink’s verification system to enhance the transparency of its stablecoins.
Christensen added that with Chainlink’s leading decentralized oracle network, the platform will help Archblock ensure off-chain fiat reserves always back its stablecoin. Like most stablecoins, TUSD is pegged to the USD and is currently the sixth largest stablecoin by valuation, with a market cap of $966 million.
By incorporating Chainlink’s proof-of-reserves system into the Archblock ecosystem, holders of the TUSD coins can verify all on-chain stablecoins with a fully collateralized reserve via the automated data feeds. Furthermore, The Network Firm (TNF), an independent accounting company, will manage the aggregation of the oracle data for the TUSD coin.
Additionally, the firm will collate real-time data of all reserve holdings in USD held at financial institutions. The data will be provided on-chain via the Chainlink decentralized oracle protocol, as revealed by Archblock’s statement.
With the TNF’s data, the TUSD smart contract will check if the net supply of the stablecoins exceeds the total amount of USD held in reserves before new coins are minted.
The Need For Proof of Reserves
According to crypto market experts, the global financial landscape, as currently constituted, operates in a highly undercollateralized manner, creating risks that can trigger a boom or bust cycle and broader market collapse.
In the case of decentralized finance (DeFi), experts believe it provides an alternative to the conventional financial system. It offers highly transparent and trusted financial products powered by smart contracts and cryptographic technologies.
The rapid growth in DeFi comes with an accompanying demand for new types of collateral beyond native on-chain tokens, including fiat-backed stablecoins, cross-chain tokens, and tokenized real-world assets.
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