Gemini Dollar (GUSD) is a stablecoin built on the Ethereum blockchain, issued by a New York trust company and pegged 1:1 to the U.S. dollar. Gemini Dollar, launched by Tyler Winklevoss and Cameron Winklevoss received approval from the New York Department of Financial Services (NYDFS) to launch in 2018. ^[1][2]

Overview

The Gemini Dollar (GUSD) coin was launched by the Gemini Trust Company (Gemini) owned by the Winklevoss Twins on the 10th of September, 2018, after receiving regulatory approval from the New York State Department of Financial Services (NYDFS). ^[2][4]

The Gemini Trust Company (Gemini) is a digital currency exchange and custodian that allows buying, selling, and storing of digital assets and it was founded in February 2014.^[2]

The Gemini Dollar (GUSD) is an ERC-20-compliant token that can be transferred on the Ethereum network and its smart contracts are audited by security company, Trail of Bits Inc. Its US dollar reserves are held at a United States bank and are eligible for Federal Deposit Insurance Corporation (FDIC) “pass-through” deposit insurance. ^[1]

"The Gemini dollar is part of our mission to build the future of money ... It is the missing link between the traditional banking system and the crypto economy." - Tyler Winklevoss^[7]

Technology

GUSD maintains a fixed exchange rate of 1:1 with the US Dollar, the currency it is pegged to. This means that the value of GUSD is always equal to that of the USD. To maintain this stability, Gemini has implemented a reliable mechanism to increase the token's supply. As the supply of USD grows, the circulation of GUSD also grows accordingly. Consequently, Gemini effectively prevents the quantity of GUSD from exceeding the amount of the underlying asset.^[8]

To verify that the necessary 1:1 peg is backed by dollars, the deposit balance at Gemini’s U.S. bank is examined on a monthly basis by LLP, BPM, an independently registered public accounting firm. ^[2]

Gemini mints new GUSD tokens and adds a corresponding amount of USD to the backing bank account when a customer requests a withdrawal through the Gemini exchange. Conversely, when GUSD is deposited into a Gemini wallet, it is automatically converted back into U.S. dollars. ^[1]

Smart Contracts

There are three kinds of smart contracts used by Gemini Dollar: ‘Proxy,’ ‘Impl,’ and ‘Store.’

• Proxy: is the public face of the Gemini dollar. ‘Proxy’ delegates the right to execute the logic that governs token transfers, issuance, and other core features to the smart contract known as ‘Impl'
• Impl: delegates ownership of the ledger to the smart contract known as ‘Store’
• Store: the external and eternal Gemini dollar ledger^[1]

Security Features

The Gemini dollar system implements the following security features:

• Offline Keys: Keys that approve high-risk actions are stored offline in Gemini's proprietary Cold Storage System.
• Key Generation: Keys are generated, stored, and managed onboard hardware security modules (HSMs).
• Dual Control (multi-signature): High-risk actions require approval (i.e., digital signatures) from at least two signers.
• Time Lock: After approval, high-risk actions are locked for a minimum period before being executed. This provides a grace period to detect and preemptively respond to potential security incidents.
• Revocation: Pending actions can be revoked, allowing for the nullification of erroneous or malicious actions before being executed.^[1]

Products

Gemini Credit Card

The Gemini Credit Card enables users to earn rewards in various cryptos, such as Bitcoin, Ethereum, and others. The card offers immediate deposits of crypto rewards. This means that the crypto earned through card usage is deposited directly into the user's Gemini account at the time of the transaction, without any delays or trading fees. ^[9]

Gemini ActiveTrader

Gemini ActiveTrader is a crypto trading platform designed to provide users with a professional-level trading experience. It offers advanced charting tools, crypto derivatives trading, and a variety of order types to cater to diverse trading needs. ^[10]

Gemini Derivatives

Gemini Derivatives allows users to leverage their crypto assets to manage risk, generate returns, and gain directional exposure. It offers perpetual contracts, with dated futures and options and it is available via ActiveTrader only. ^[11]

Gemini Custody

It allows users to store and manage digital assets. It is regularly audited and subject to the capital reserve requirements and compliance standards of a traditional financial institution. The Gemini Custody® secured $75 Million in cold storage insurance coverage for certain types of crypto losses from our Custody platform. ^[12]

Gemini Clearing

Gemini Clearing allows two parties to settle a trade-off on the order book. Gemini acts as a confirming third party in pre-arranged transactions, helping ensure timely Settlement while mitigating counterparty risk. ^[13]

Gemini Wallet

Gemini provides users with the option to store their assets using deposit addresses in either their insured hot wallet or institutional-grade cold storage system. This ensures the safety and security of users' assets. Gemini's wallet infrastructure is designed to support all the listed assets, including BTC, ETH, etc. ^[14]

Gemini Staking

Gemini Staking allows users to participate in the blockchain ecosystem and receive staking rewards on their crypto. ^[15]

Gemini eOTC

Gemini eOTC is an automated over-the-counter trading platform. It provides real-time visibility into changing asset prices as well as the status and execution details of placed orders. ^[16]

GUSD Depeg & OKX Delisting

On January 31, 2023, Gemini Dollar (GUSD) stablecoin lost its $1 peg to as low as $0.98 following its delisting from the OKX cryptocurrency exchange. ^[30][31]

OKX did not offer any specific reasons why GUSD was delisted. Instead, they cited a general policy of regularly reviewing the qualifications of listed projects to maintain a robust spot trading environment.^[30]

MakerDAO Decreases GUSD

In June 2023, DeFi lending platform and stablecoin issuer MakerDAO approved a $390 million reduction in its holdings of GUSD from its reserves. The protocol’s community put out a proposal to decrease the maximum amount of GUSD to $110 million from $500 million held in Maker’s DAI stablecoin reserve, called the Peg Stability Module (PSM). ^[27][29]

“Reducing GUSD exposure could allow for better capital efficiency by deploying funds into higher revenue generating opportunities,” - the proposal said. ^[27]

The decision is part of MakerDAO’s evaluation of its Peg Stability Module (PSM), which held $489 million worth of GUSD. Less than 24 hours before the vote ended, roughly 94% of voters were in favor of the proposal to cut GUSD. ^[28]