Recently, USD1 has achieved real-time on-chain reserve proof. Why is this so important?

1/ What is reserve proof? Why is transparency in stablecoins so crucial?
First, stablecoins are divided into various types such as fiat-collateralized and over-collateralized. USD1 is one of the most mainstream fiat-collateralized stablecoins.
The issuer deposits 1 USD (Treasury bonds, cash equivalents, etc.) into a bank/trust, then issues 1 stablecoin to you. You can redeem it at any time 1:1 for USD.
Reserve proof is like an audit report, ensuring that the platform’s actual assets (reserve assets) are ≥ the total amount deposited by users (liabilities). This guarantees the stability of USD1’s redemption mechanism, allowing 1:1 redemption and arbitrage at any time.
2/ You might ask, is an audit report always accurate?
USD1 has a public dashboard showing total reserves, collateralization ratio, etc.
WLFI’s USD1 reserves are held in BitGo (a regulated trust company), with real-time updates.
3/ Why can USD1 achieve real-time on-chain reserve proof?
Chainlink CRE continuously pulls reserve data from BitGo, performs node verification, and then automatically uploads the data on-chain.
It provides real-time aggregation of the total supply across the entire chain, with live updates, real-time data, open-source code, and user verification.
After increasing transparency, regulators, institutions, and users will have more confidence.
Holding USD1 likely involves interests; research and sharing are for reference only. NFA / DYOR