This is all about the Gemini Dollar review, one of those stablecoins that is pegged at 1USD for every 1 GUSD, despite the fact that the value of the Gemini Dollar can go up and down. But the ups and downs are only close to 1 USD.
At the time of writing, 1GUSD is equivalent to $0.9923 drops 0.24%. Gemini Dollar is issued by a New York trust company, which is a US regulatory oversight. Gemini’s Reserve backed in Boston’s State Street Bank. And currency insured in the FDIC (Federal Deposit Insurance Corporation) deposit insurance program.
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- 1 Gemini Dollar explained
- 2 How does the Gemini Dollar work?
- 3 Is Gemini Dollar safe?
- 4 Is Gemini Dollar FDIC insured?
- 5 Does Gemini Dollar earn interest?
- 6 How to buy Gemini Dollar?
- 7 GUSD vs USDT
- 8 GUSD vs DAI
- 9 Is Gemini Dollar a good investment?
- 10 Gemini Dollar price prediction
- 11 Gemini Dollar risk
- 12 Conclusion
Gemini Dollar explained
Gemini Dollar is a cryptographic token that is strictly pegged at 1:1 to the USD. This token walking on the Ethereum network and is an ERC-20 compliant token.
Gemini Dollar is a combination of creditworthiness and US dollar price stability by utilizing a technology cryptocurrency and US regulatory oversight.
Gemini dollars were created at the time of purchase on the Gemini platform and redeemed or “destroyed” at the time of sale on the Gemini platform.
GUSD already has FDIC insurance eligible reserves of up to $250,000 per user held in the State Street Bank and Trust. Gemini is a company regulated by the New York Department of Financial Services.
Gemini Dollar history
GUSD is a product launched by Gemini Trust Company, LLC, and a New York trust company. The founders of the company were two brothers named the Winklevoss brothers on September 9, 2018. Winklevoss is a twin brother who is known as the most successful Bitcoin investor. Both names are Cameron Winklevoss (Co-founder), Tyler Winklevoss (Co-founder).
The product of Gemini Trust Company not only releases GUSD, but also it is a cryptocurrency exchange, users can buy cryptocurrency which supports more than 40 cryptos. Investors can also trade crypto to crypto for profit on the active trader platform.
Other products from Gemini are Gemini Custody, Gemini Clearing, Gemini pay, and Gemini Wallet.
How does the Gemini Dollar work?
Gemini dollar does not have a hard cap, there is no maximum supply, Gemini dollar is made when there is a Gemini Dollar procurement transaction on the Gemini platform, and will be destroyed when there is a Gemini dollar sale on the Gemini platform.
Customer of Gemini exchange can convert USD to Gemini Dollars and deposit them to a specific Ethereum address. Then Gemini, who is the issuer of Gemini dollars, will adjust to the number of tokens in circulation.
Since Gemini uses the Ethereum blockchain, the token generation is the result of an executable smart contract. The smart contract responsible for increasing the supply must be signed by the online lock to some extent.
However, if you are going to mint coins beyond a certain limit, you need an offline signature to increase the security of token issuance. These smart contracts require multi-signature approvals for “high-risk actions”, which include offline signatures for additional fault tolerance.
Then this particular action is time-locked for a detection or response period to a security incident. Any pending actions can be lifted to avoid bad actors.
How to use the Gemini Dollar?
Gemini dollar is a token built on the Ethereum Blockchain network, how to use GUSD will refer to the needs that exist on the Ethereum blockchain platform.
A GUSD transaction requires 25 confirmations, this takes about 15 minutes, but the transaction takes longer to convert to Bitcoin, approximately 2-3 hours.
The use of GUSD can be used to participate in Defi projects, with a stable value GUSD holders can participate in saving or lending to earn interest. GUSD holders can participate in the BlockFi Interest Account, to earn interest.
Gemini Dollar fees
Referring to the official Gemini website, there is no fee for buying and selling GUSD on the Gemini platform, aka free. But maybe customers will be charged a fee when buying GUSD on other exchanges.
Meanwhile, trading fees also depend on the fee schedule which is divided into Mobile Fee schedule, Web Fee schedule, ActiveTrader Fee schedule, Custody Fee schedule, and Transfer Fee schedule. The average transaction fee ranges from 1.49% for the above $250 transactions.
While the deposit fee is free for all cryptocurrencies and wire transfers, debit card deposits are charged 3.49% of the total purchase amount. Withdrawal fees, also depend on the cryptocurrency being withdrawn, where each cryptocurrency has a varying fee.
For the withdrawal fees, you can check here.
Is Gemini Dollar safe?
In its history, there has been no news of Gemini hacking, moreover, Gemini has used FDIC to insured funds from customers. This logical picture is the reason for Gemini Dollar’s security which gets legitimacy from the government.
However, any risk will always exist, the use of smart contracts which are the pillars of this coin is if a bug occurs.
Alex Lebed, the founder of another stablecoin called Stableunit, found that the way GUSD is implemented allows Gemini to mint an unlimited number of tokens, freeze accounts, or make all tokens non-transferable. He found that the custodian could change the token implementation every 48 hours.
Gemini Dollar backing
GUSD ( Gemini Dollar) is the first stablecoin in regulation by the New York Department of Financial Services (NYDFS). Gemini Trust Company LLC is a company that holds USD deposits according to the number of GUSD tokens in circulation. The company has USD reserves that back the Gemini Dollar at Boston’s State Street Bank.
Is Gemini Dollar FDIC insured?
FDIC or Federal Deposit Insurance Corporation is a type of Deposit Insurance Corporation in the United States. it is this institution that has insured Gemini Dollar for a value of $250K USD per user.
However, the insurance is not included in the Gemini earn program. This is a lending program where Gemini collaborates with market lending providers such as Genesis, users can earn daily from this program. However, their funds are not insured by the FDIC insurance agency or Gemini.
Does Gemini Dollar earn interest?
As mentioned earlier, Gemini users can earn from lending programs. However, not all countries support this program, and only Singapore and US residents are eligible to participate in the Gemini earn program. In the Gemini earn program, Gemini is currently working with Genesis.
Users will get daily earn every 4 p.m. ET after the funds transfer in the Gemini earn program. Where the daily interest rate may vary, this depends on the liquidity pool of the lending market.
In the Gemini earn program, each loaned token will be subject to a fee schedule, this is different for each token, for example, AAVE is charged 0.38%, different from 1INCH subject to 4.97%. Check the fee schedule here.
How to buy Gemini Dollar?
How to buy Gemini Dollars, the first thing is to deposit flat money, or if you have a cryptocurrency supported by Gemini, you can deposit with cryptocurrency.
For deposits with flat money, you can then connect a bank account and make a wire transfer, which process also depends on the bank.
Bank transfer takes between 4-5 days even though the funds are already available in your Gemini account if you are going to make a withdrawal.
Once you have a certain amount of funds in your Gemini account, you can then buy Gemini dollars through the Gemini exchange. You can also take advantage of the active trader facility if you want to trade BTC/GUSD, ETH/GUSD, and so on.
Where to buy Gemini Dollar?
At this time there are many exchanges that trade GUSD or Gemini Dollars, but specifically, users can buy Gemini Dollars on the Gemini exchange, this provides its own advantages compared to buying on other exchanges. Because Gemini is a GUSD issuer, buying there is no purchase fee.
But another alternative is to buy GUSD on an exchange that provides GUSD tokens, you can find it on Coinmarketcap to see a list of exchanges that market GUSD.
To buy GUSD you can choose from the following sample exchanges:
- Uniswap v2.
- The Rock trading.
- Bancor network.
GUSD vs USDT
Comparing the two between USDT and GUSD both act as stablecoins. Its value is pegged at 1:1 against the US dollar. However, both have differences, especially regarding regulation.
Gemini dollar is the first stablecoin to get regulation and the relevant authorities upgrade the trustworthy GUSD to a token that bridges transactions on the Ethereum blockchain.
Another advantage is that Gemini Dollar will always audit every month to ensure that the USD reserves are in balance with the GUSD tokens in circulation.
On the other hand, USDT has experienced audited delays where the lack of transparency about USD reserves makes Tether a stablecoin whose accountability is actually questionable.
However, looking at market capitalization, USDT is far superior to GUSD. Where USDT has reached more than 62 billion USD, while GUSD has only reached more than 311 million USD. This is a very high difference. Although legally GUSD has got the first regulation as a trusted company, USDT’s popularity has preceded GUSD.
It is not surprising that USDT’s market capitalization is much higher than that of GUSD. The current amount of USDT in circulation stands at 61.98 billion USDT, while GUSD stands at 313 million tokens in circulation currently.
GUSD vs DAI
GUSD and DAI are both stablecoins that use the Ethereum network and run on the ERC-20 token. DAI is a token issue by MakerDao which is a decentralized company that works autonomously.
If the GUSD is centralized. Because it is issue by a Gemini Trust Company, it has USD backups. Unlike DAI, it is not a stablecoin that uses USD backup but is backing up by other cryptocurrencies.
Users who wish to hold these coins can submit Ethereum-based assets into smart contracts. That use them as collateral to maintain their value against the US dollar.
In terms of market capitalization, DAI is currently still superior to GUSD. Where DAI’s market capitalization currently ranks at 17th with a market cap of more than 5 billion USD. Compare with GUSD which only reached 311 million US dollars.
Is Gemini Dollar a good investment?
Gemini dollar is a stablecoin pegged at 1:1 against the US dollar. So don’t expect if you buy Gemini Dollars you will get fantastic profits like what happened with Bitcoin.
Stablecoin users typically take a benefit from the price being pegged for a specific purpose. He can participate in Gemini earn using GUSD, or if he wants to transfer funds it is a safe way to earn stable value.
Or even if he wants to keep the GUSD in the long term, there is no concern that he will experience excessive inflation against the flat USD.
While referring to the Cointobuy.io reference, the Gemini dollar only gets a rating value of 3.2 in terms of safety investment ranking. This value is based on several parameters including market capitalization, 24-hour changes, volume ratio, market social following, and so on. This means that this is not an investment asset that is a top priority for investors.
Gemini Dollar price prediction
Regardless of whether the Gemini dollar is a good investment or not in the future, here we present some forecasts about the Gemini dollar from several popular forecasting sites online.
- Tradingbeast predicts the price of the Gemini dollar will reach $1.5916207, by the end of 2021. Although this is quite absurd as the price of GUSD is pegged at 1 USD. Prediction of last 2022 maximum price 1.5899489, prediction of 2023 maximum price of 1.5853805, prediction of 2024 maximum price of 1.5765744.
- Digitalcoin price prediction Gemini Dollar in 2022 could reach up to $1.56 USD. 2023 could reach $2.26 USD. 2024 the price could reach $2.79 USD. 2025 could reach $3.37 USD. In 2026 it could reach $3.7 USD. In 2027 it could reach $4.07 USD and in 2028 it could reach $4.5 USD.
- WalletInvestor predicts that GUSD is not a good asset for investment. Their forecast the Gemini dollar price at the end of 2021 to reach $1,002 USD. But will fall in the next five years with a prediction of $0.997.
Gemini Dollar risk
GUSD despite being the first stablecoin to get official government regulation. And is always audited monthly to ensure compatibility between USD reserves and circulating tokens. But it turns out that the use of Gemini dollars also has its own risks.
A common risk is when using GUSD for the Gemini earn program, where users will earn daily earn. However, the risk is that the user will lose control of the money. Because there may be a possibility that the borrower will not be able to return it so that the lender loses his money.
Another risk is withdrawal limits. Sometimes users have limited withdrawals from tokens in their wallet accounts due to the rules of the exchange.
Finally come to the conclusion of the Gemini dollar review. This is one of the stablecoins that is an alternative to Tether and other stablecoins.
Although the market capitalization of GUSD is still below USDT and DAI. Because it is the first stablecoin that has regulation. From a security perspective, it should be the safest token compared to others.
However, it is still difficult to say that the Gemini dollar is a good investment. Because its market cap is still far below its predecessors USDT and DAI. It still has to compete for control of the market.
Note: this article is just information and opinion, not investment advice, crypto and forex are risky assets, investors are responsible for their own funds.
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