Decentralizing Banking & Finance
There has been a lot of market turmoil these past few months. The markets have a fickle nature. The bull market felt unstoppable, only to humble many (MicroStrategy, Tesla, Three Arrows Capital, Celsius, Voyager, and BlockFi come to mind — and so does SBF, who is bailing out the latter two). These are the ebbs and flows of markets, and perhaps no market experiences a larger magnitude of crests and troughs than crypto. That’s because this market is new, and largely unregulated. With the collapse of TerraUSD, the idea of a “stablecoin” now faces even more regulatory scrutiny. It’s always been Trustline’s mission to advance crypto markets by bridging the gap between traditional systems and new crypto systems, and we are not deterred by the recent setbacks. In fact, the past few months have made it clear what path we’re to follow. The CEO of Ripple Labs, Brad Garlinghouse, commonly refers to the Ripple team as “the adults in the room” in the crypto world. The team at Trustline holds itself to the same standards. Innovation is best served responsibly.
Trustline has walked the fine line of radical innovation and responsible innovation. We’ve made progress by 1) fine-tuning our business model to follow best practices put forth by major blockchain industry associations and US regulatory guidance, 2) seeking partners to help us serve accredited investors for experimental DeFi, and 3) executing our roadmap under periods of major uncertainty. We have learned a lot through experimentation, and now we’re taking the steps to ensure we don’t compromise on innovation while growing. Trustline started going down the long road toward DeFi compliance, where we sought legal advice of the FinTech team from one of the top law firms in the United States. We made the decision to delay the launch of the Trustline mobile payments app and Probity stablecoin issuance and lending protocols until we acquire the proper licenses (which will subject us to regulatory oversight). As we began the process, we realized that the regulatory regime in the United States largely relies on the existing laws and frameworks in its approach to regulating crypto. There’s no need to rewrite the entire body of law because, truth be told, there is a lot that is covered by the existing laws. But there are also a lot of questions still to be answered. Those questions are in the process of becoming clear and we expect within a 1–2 years there will be a solid framework for in place for blockchain to create widespread economic utility. We believe that the future of value creation in blockchain is through the financial transparency of any firm that you trust with your money or investments. Instead of public companies reporting their financial results each quarter, the whole process can be made more real-time. Transparency can also be helpful to understand the impact of leverage and rehypothecation in the economy. There really is no limit to the scale and impact this technology can have.
We then made the responsible decision to restrict access to our deployment of Probity to accredited investors. Despite this decision, we are standing by our word to the community that the audited Probity codebase will be made open-source. Trustline will not operate or otherwise be involved in an ongoing effort to support a public version of Probity, but we encourage responsible innovators to do so.
Now to recap some of the work that Trustline has accomplished, we are the creators of the Probity vault system, a stablecoin engine that allows issuers to mint asset-backed stablecoins. We have also developed a margin account system that allows users to borrow stablecoins by using crypto collateral. Probity connects directly to the XRP Ledger through the Solaris bridge protocol, which is built on top of Flare network state connector technology. The Trustline app has been beta tested by many thousands of users, and we’re planning to drop commemorative non-fungible tokens of appreciation to beta participants once the XLS-20 standard is amended to the mainnet. All of this has been done by the two co-founders, Matt and Shine, over the course of a year and a half, through the support of the XRPL Grants Program that awarded a non-dilutive $100k grant last year.
We anticipate that there may be multiple Probity deployments once the project is open-source, whether they be fiat-backed, crypto-backed, commodity-backed, or other stablecoin issuances. Probity can be deployed on any EVM-based chain, but only the Flare and Songbird networks will have the native cross-chain integration with the XRP Ledger via Solaris, which is utilizing Flare’s state connector technology. Furthermore, Trustline will help organizations deploy a Probity instance under a service-based model. For example, private credit funds may wish to use Probity to raise and deploy capital, or banks and FinTechs may want to use Probity to issue stablecoins for their customers. There are many exciting opportunities to explore, and we are accepting business proposals through our intake form.
We have been working hard to secure the future of the company and the technology that we’ve developed. Trustline has grand ambitions, not only to launch a delightful zero-to-one product, but also to make the product scalable to the next wave of blockchain users. We will accomplish this by avoiding the well-trodden path, and by challenging the status quo. This is how we operate as a company; we are trail blazers.