EOS Gets Its First Stablecoin: CarbonUSD (CUSD)

Siamak Masnavi
  • 11 Nov 2018
  • /
  • In #EOS

On 9 November 2018, New York-based blockchain startup Carbon-12 Labs (better known as "Carbon"), which develops a stablecoin called CarbonUSD (CUSD), announced that CUSD was available on the EOS platform. In this article, we take a closer look at CarbonUSD.

Carbon, which was founded by Samuel Trautwein (CEO), Connor Linn, Gavin Mai (CPO), and Miles Albert (CSO), originally launched CarbonUSD on the Ethereum platform on 12 September 2018. CarbonUSD is a price-stable cryptocurrency that is fully-collateralized 1:1 by U.S. dollars held in FDIC-insured accounts.

However, the long-term plan, according to Sam Trautwein, the company's CEO, is to transition a "fiat-backed algorithmic hybrid approach" once "CarbonUSD reaches sufficient scale as a fully fiat-backed token." Here is how he explains it:

"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 November 9th, Carbon announced that CarbonUSD had also become available on the EOS platform. In a blog post published on November 10th, Trautwein explained that "Carbon’s interoperability solution enables CarbonUSD users to transfer their tokens onto the EOS blockchain, where users can transfer CarbonUSD with even lower fees and faster settlement than on Ethereum." He added:

"“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 went on to explain 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 calls itself "the world's largest encyclopedia on the blockchain"), stated:

“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”.

Featured Image Courtesy of Carbon-12 Labs

Over 90% of dApps 'Did Not Record Transactions', dAppRadar Data Shows

Omar Faridi

Smart contract-enabled, decentralized applications (dApps) are still in their early stages of development. At present, Ethereum (ETH)-based dApps have almost no transaction volume.

This, according to data from DAppRadar - which was pointed out by Twitter user Kevin Rooke on February 9th, 2019. As Rooks explains in his tweet, 86% of ETH-based dApps had zero users last Saturday, while 93% did not record any transactions. Although there are reportedly around 40 times more developers focused on creating software for Ethereum (when compared to its closest competitors such as EOS and Tron), ETH-based dApps don’t appear to have lived up to expectations.

There are about 1,375 “live” dApps built on the Ethereum blockchain, however the number of active users have remained consistently low. According to data from DAppRadar (referenced by Rooke), there are around 1,828 “live” dApps “across all platforms”, but 77% of them had “0 users” and 85% of them “had 0 TX (transaction) volume” (on February 9th).

Do We Need DApps?

Out of the total 1,375 Ethereum-powered dApps identified, there were only 200 that actually had (one or more) users last Saturday. Meanwhile, 426 dApps out of a total of 1,828 dApps developed across all platforms had users on February 9th. As Rooke mentioned: “Among the 426 dApps that actually had users, there were 157k active addresses today.”

Commenting on the relatively low dApp usage, prominent bitcoin advocate and author, Saifedean Ammous, remarked:

A brief look at them suggests all of these would be better run as apps. I'm curious if you could give me an exception, a dApp that benefits from being distributed?

In response to Ammous’ question, Rooke said that “perhaps some gambling dApps will see traction” and that distributed apps could potentially see more adoption because they are “much more difficult for governments to regulate [and/or] shut … down.”

Interestingly, Vortex (@theonevortex), a well-known bitcoin enthusiast and popular commentator on Twitter, remarked: 

Gambling and dark markets are essentially the only use case currently for dApps.

EOS & Tron Already Have Greater "On-Chain USD Volume" Than Ethereum

As explained, dApps are in their preliminary stages of development and during their first few years (of being introduced), cryptocurrencies had also been associated with the dark web and mainly thought of as a means to help engage in illicit activities. Since then, bitcoin (BTC) and other digital assets have been more widely adopted. Cryptocurrencies also have a supportive and growing ecosystem.

It’s possible that more legitimate use cases for dApps could be developed in the foreseeable future. In late January 2019, researchers at Diar released a report in which they mentioned that: 

EOS dApps are [currently] accounting for 55%, Tron 38% leaving Ethereum applications with a mere 6% of total on-chain USD volume.

While on-chain transaction value might not be the best way to measure the performance or usefulness of dApps, the introduction of newer platforms for developing distributed applications indicates that a significant amount of development work is being done to improve the underlying technology.