This post was written by Neil on May 20, 2021
The Trustline Credit Network enables liquidity providers to mint the Aurei stablecoin and to earn interest from borrowers. Borrowers can borrow Aurei on the Flare network and the XRP Ledger, with other chains supported by Flare.
Backed by FLR, XRP, and other cryptocurrencies. Aurei will also be the first stablecoin to be issued trustlessly on the XRP Ledger.
Aurei (code: AUR, symbol: ₳) is the stablecoin that is created by the protocol liquidity providers. It is an over-collateralized crypto stablecoin that may be backed by Spark (FLR) or other F-assets such as FXRP. Every unit of Aurei corresponds to a unit of an underlying collateral asset maintaining a value greater than $1. In some cases, over-collateralization of 2x or greater is required to ensure that the price of Aurei maintains the peg to the US dollar.
Probity is the decentralized application (“dApp”) where users can provide Aurei liquidity for borrowers. The Trustline mobile app sources funds for payments from Probity for every credit-based transaction. Behind the scenes, Probity is calling the Trustline Credit Network smart contracts.
The Trustline Credit Network token (code: TCN, symbol: ₸) is a semi-stable governance token earned by liquidity providers. TCN represents interest earned by lending Aurei. TCN owners vote and decide on proposals by staking a supermajority of TCN. TCN is the first stablecoin to have voting rights. Due to the voting rights, a premium may be placed on the price of TCN. However, it’s guaranteed to stay at (or slightly above due to the voting premium) $1 while Aurei retains the peg. Aurei suppliers have the option to withdraw interest in either TCN or AUR.
To issue Aurei in a trustless manner, a user needs a Flare account and two XRPL accounts - one of which will be blackholed.
~ The user goes to Probity and takes out an AUR loan
~ Send the AUR and the XRPL destination address to the bridge contract
~ Follow Flare’s protocol to issue a precise amount of AUR on the XRPL
~ The bridge contract marks the transfer to the XRPL as complete
If done correctly, the issuer of Aurei on the XRPL is the Flare blockchain — a completely decentralized entity. Any issuer who follows the process correctly can be verified from the bridge contract. Trustline will create new tools to make it easy to verify the source of AUR and will maintain a list of active issuers.
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