Everything You Need to Know About Gemini Dollar Stablecoin

Cryptocurrencies have all these dazzling features like decentralization, peer-to-peer transactions, and cryptographic security that have made them the darling of investors. The asset class has bucked the trend in these ways, as well as another not so good one, depending on who you’re asking: they’re prone to dramatic price swings. If you’re asking investors, this unpredictability in price is a good thing since it allows them to speculate. 

For the rest of the people who wish to utilize the secure and anonymous currency for everyday activities, the usual cryptocurrencies are not an option. Stablecoins, cryptocurrencies that are backed by an external asset, is an innovation to solve this problem. 

What is Gemini Dollar? 

Gemini dollar is “purpose-built” stablecoin “to bring the value of the U.S. dollar into the modern digital era,” according to its website. 

What this means is it’s a cryptocurrency that borrows the stability and credibility of the U.S. dollar and combines it with the fastness, security, and allure of digital money. New Gemini tokens are printed in a highly controlled environment that ensures the amount of Gemini dollars issued and in supply do not exceed the underlying U.S. dollar reserve.

What are Stablecoins? 

Stablecoins are cryptocurrencies that are pegged to a “real-world” asset. The real-world asset could be anything from Fiat currency to a commodity such as gold and so on. Still, some stablecoins are pegged against another cryptocurrency whose supply is controlled by an external market mechanism. 

The idea behind stablecoins is to provide some stability and predictability to a cryptocurrency. Cryptocurrencies are known for their wild and unpredictable price swings, which renders them unsuitable for regular and everyday use. With stablecoins, users get the privacy and security of cryptocurrencies together with the stability and reliability of crypto. 

Stablecoins usually have the same value as their underlying asset. For instance, if a coin is pegged at the ratio of 1:1 to the U.S. dollar, its value will revolve around the value of the dollar. Stablecoins can usually be redeemed for their underlying assets.

Who is Behind Gemini Dollar? 

Gemini Dollar is a project of Cameron and Tyler Winklevoss, who are venture capitalists, Bitcoin investors, and owners of the Gemini Dollar exchange. The Gemini Dollar website states that the currency was created by “top technologists and security engineers.”

Gemini is regulated by the New York State Department of Financial Services. The currency takes a departure from a stablecoin norm but is backed by only one bank – State Street. The company is periodically regulated by accounting firm BPM so as to stay in compliance with auditing laws. 

How Gemini Dollar Works

Gemini Dollar runs on the Ethereum blockchain. The coins are generated when you deposit Fiat money into Gemini’s custodian account. The Ethereum blockchain confirms the supply of coins, while the auditing firm sees to it that the supply is equivalent to the amount of USD holdings. Each Gemini dollar is equivalent to one U.S. dollar held in the backup reserves. 

The Gemini dollar ecosystem comprises three critical layers: 

i) The Proxy Layer: this is the governance layer which identifies and allows eligible on-chain processes, and can stop any process if need be. It also creates and transfers GUSD coins. 

ii) The Impl Layer. This layer is where data and logic for the execution of smart contracts reside. Here, creation, transfer, and token ‘burning’ are carried out. This layer also ensures that a GUSD is printed for every USD held in reserve. 

iii) The Store Layer. This ledger oversees transactions and makes them public so the public can view Gemini dollar transactions. It also serves as the “external and eternal Gemini dollar ledger.”

Security Features of Gemini Dollar

The Gemini Dollar system utilizes the following security features to ensure the safety of funds and client privacy. 

  • Offline Keys. These are keys that approve high-risk actions and are stored in Gemini’s cold storage system. 
  • Key Generation. This is the process by which Gemini generates, stores and manages keys by use of hardware security modules (HSMs)
  • Multi-signature. Multi-signature keys are used to approve risky transactions. This process involves two or more people signing off a transaction. 
  • Time lock. This mechanism stops transactions deemed as risky or suspicious for a certain period before execution. During the time lock, the system can detect and respond appropriately to any security or privacy breach.
  • Revocation. This mechanism revokes any malicious or erroneous transactions before execution. 

How Does Gemini Dollar Differ From Other Stablecoins? 

Gemini Dollar belongs to a class of stablecoins that rely on a centralized entity to issue coins and manage a real-world asset reserve. Some of the stablecoins in this category include USD coin (USDC), TrueUSD (TUSD), Paxos Standard Token (PAX), and Tether (USDT).

These coins differ from each other in their function only slightly but otherwise operate on the same centralized model of issuing coins, freezing suspicious transactions, and so on. The key takeaway is that they are not censorship-resistant like, say, Bitcoin or Ethereum.

Gemini Dollar: Tokenomics

Unlike other stablecoins such as Tether and USDC, the Gemini dollar is not enjoying much dominance in the crypto market. As of April 7, 2020, the stablecoin is ranking at #405 amongst all cryptocurrencies. It has a market cap of $5,637,192 and a 24-hour trading volume of $26, 693, 402. It’s a circulating supply of 5,592,534, and its total supply is of the same value. 

Where to Buy and Store GUSD 

You can purchase Gemini Dollar at any of these exchanges: BitFinex, CoinMex, BitMart, OKEx, YoBit, Bitrue, and so on. In some of the exchanges, you can buy the currency with U.S. dollars, while in others, you need to purchase a cryptocurrency such as BTC, ETH, XRP, USDT, and so on. 

Being an ERC token, the Gemini dollar can be stored in any Ethereum wallet. Some popular options include MyEtherWallet and MetaMask. Alternatively, you could store them in safer hardware wallets such as Trezor and Ledger Nano. 

Final Thoughts

Gemini dollar’s proposition doesn’t differ much from that of other stablecoins, but it’s mysteriously not performing as well as them. Whether it’s because of branding or market factors beyond its control, it’s hard to figure why. Interested investors can only wait and see if there’s an upturn for the stablecoin in the near future. 


All You Need to Know About USDC 

The idea behind Bitcoin, the first cryptocurrency, was a digital currency that could facilitate payments in a peer-to-peer, secure, trustless, and decentralized environment. But Satoshi Nakamoto probably hadn’t foreseen the extreme volatility that would be associated with Bitcoin and indeed the entire crypto market.

The unpredictable nature of cryptocurrencies has made them best suited for speculative investment and trading, and ill-suited for day to day transactions – the original vision.

Stablecoins have been proposed as the solution to this – users can have the best of both Fiat and cryptocurrency. USDC, a Circle company creation, is one of the stablecoins that are adding value to users by providing a secure, predictable, and reliable cryptocurrency.

What are Stablecoins?

Stablecoins are a class of cryptocurrencies whose value is backed by an external asset. The idea behind stablecoins is to offer the price stability of Fiat currency while preserving the security and privacy offered by cryptocurrencies. A stablecoin can be pegged to a Fiat currency, another crypto asset, or a commodity. Other stablecoins mitigate volatility by controlling supply, much like central banks control the supply of natural currencies.

Ideally, a currency should possess the ability to be used for everyday transactions, including payments. But the extremely volatile nature of cryptocurrencies renders them unsuitable for such everyday use. For example, would you buy pizza today with Bitcoin Cash coins, not knowing if their value will increase tomorrow? In the same vein, would a merchant accept payment via the same coins, while knowing their value might drop the same day?

Stablecoins step in to solve this problem. Via these coins, users can transact with the confidence that the currency value is not going to be knocked tomorrow, and that their transactions are safe and private.

What is USD Coin?

USD Coin (USDC) is a stablecoin that’s pegged to the US dollar. Launched in September 2018, it’s based on the Ethereum network, and it’s an alternative to other stablecoins that are also backed by the US dollar, such as Stellar and TrueUSD (TUSD). USDC was launched as a collaboration between Circle, a peer-to-peer payments company, and Coinbase, the crypto exchange company.

How does USDC Work?

Every USD coin is backed by a US dollar, and tokenization is the process by which US dollars are turned into USD tokens. This process involves three steps:

  1. A user sends US dollars to the token holder/issuer.
  2. The token holder utilizes a smart contract to create USD coins equivalent to the amount of US dollars.
  3. The issuer sends the USDC to the user while keeping the US dollars in a reserve.

The process of redeeming USDC for USD is not very different:

  1. A user sends a request to the USDC issuer to redeem an equivalent amount in USD for USDC tokens.
  2. Issuer sends a request to the USDC smart contract to exchange the tokens for an equivalent amount in USD
  3. Issuer sends the USD to the user’s bank account. The user receives the sent amount, exclusive of all transaction fees.

Issuers of USDC are required to maintain and provide full disclosure of the reserve and liaise with financial institutions to maintain full reserves of the USD dollar.

How to Use USD coin

USDC is an ERC20 token, and hence it’s compatible with any ERC20-compliant application.  To get started on the Circle USDC platform, you need to sign up for an account and link it with your bank account. This allows you to do any of the following:

  • Tokenize US dollars
  • Redeem USD coins
  • Send and receive USDC to/from any Ethereum wallet address

It’s free to tokenize USD and redeem USDC. However, you will be charged a $50 fee for any erroneous or rejected bank transfers.

The minimum amount of USD coins you can redeem is 100, but you can tokenize as many US dollars as you want. Both transactions only take place on business days.

How Does USDC Differ from Other Stablecoins?

In order to identify which category of stablecoins USDC belongs to, we need to first identify the four categories of stablecoins:

i) Fiat-collateralized: these are stablecoins that are backed by Fiat currency, and are centralized by nature. Examples include Tether (USDT), Gemini Dollar (GUSD), and Paxos Standard Token (PAX).

ii) Crypto-collateralized: these are stablecoins that are backed by crypto assets. Examples include Makercoin (MKR) and Havven (HAV)

iii) Algorithmic non-collateralized: these are stablecoins that rely on a mechanically-generated algorithm that changes the supply of the token if need be so that the price remains stable in a volatile market. These stablecoins are modeled after how central banks regulate national currencies. Examples include Basis and Kowala.

iv) Hybrid: these are stablecoins whose model combines any of the above approaches. An example project is Carbon. 

USDC falls in the first category of stablecoins. Generally, these stablecoins differ only subtly in structure or governance, but the idea remains the same: the backing by a real-life asset or value.

Tokenomics of USDC

As of April 3, 2020, USDC is trading at $1, with a market cap of $690, 167, 043, and a 24-hour volume of $1, 066, 065, 241. Its circulating supply is a total of 688, 989, 269. USDC’s total supply is 694, 228, 227. The coin is also #18 in market cap.

 Where to Buy and Store USDC

USD Coin can be purchased from any of several popular exchanges, including Coinbase, Coinbase Pro, Binance, OKEx, Kucoin, Binance, CoinEx, Poloniex, and so on.

Some exchanges will let you buy directly with Fiat, while in other exchanges, you will need to exchange Fiat for crypto and then exchange it for USDC. Some common pairs include BTC, ETH, BNB, XRP, LTC, and DASH.

After you purchase your USDC, you can store it in any Ethereum wallet. Popular options include MyEtherWallet, MetaMask, and Jaxx wallets. You might also consider the safer option of a hardware wallet. Some popular options include Ledger Nano S and Trezor. 


USDC is only two years old but has already catapulted to the top 20 in market rank. Perhaps this is a testament to the currency’s individual strength and potential, or it’s a demonstration of the potential of stablecoins in general. Either way, USDC doesn’t look to be slowing down any soon, and its users can be assured of a stable and reliable cryptocurrency.