# \[IP\] Remove TUSD From the Emergency Collateral Backing

**URL:** <https://forum.reserve.org/t/ip-remove-tusd-from-the-emergency-collateral-backing/905>\
**Category:** eUSD RFC\
**Created:** [August 29, 2024, 1:34am UTC](https://forum.reserve.org/t/ip-remove-tusd-from-the-emergency-collateral-backing/905 "2024-08-29T01:34:02Z")\
**Posts on this page:** 4\
**Page:** 1

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**Author:** ![Sawyer](https://dub1.discourse-cdn.com/flex005/user_avatar/forum.reserve.org/sawyer/32/187_2.png) [@Sawyer](https://forum.reserve.org/u/Sawyer)\
**Post date:** [August 29, 2024, 1:34am UTC](https://forum.reserve.org/t/ip-remove-tusd-from-the-emergency-collateral-backing/905/1 "2024-08-29T01:34:02Z")

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**Summary**

This proposal removes TUSD(TrueUSD) from the emergency collateral.

Current Emergency Collateral Backing:

USDC  
USDT  
USDP  
TUSD  
DAI

Proposed Emergency Collateral Backing:

USDC  
USDT  
USDP  
DAI

**Abstract**

The proposed proposal, if enacted, would remove TUSD(TrueUSD) from the emergency collateral.

The Emergency Collateral Backing is a separate basket of tokens used only in the case of a default of the primary collateral. The Emergency Collateral has a priority order, in the case of a default of the primary collateral, the first asset in the Emergency Collateral will be used to replace the faulty collateral. If the first asset in the emergency collateral has depegged the protocol will look to the second asset in the emergency collateral, and it will continue this process until it finds an asset in the Emergency Collateral Basket that has not depegged.

**Problem Statement**

TrueUSD:  
According to [bluechip.org](http://bluechip.org) TUSD has a “D” rating. The details about the company’s corporate information, ownership and the identity of the management team are not disclosed. The general lack of transparency in relation to reserves, management structure and operations are all reasons as to why this asset was given a “D” rating.

There have been more frequent depegs with TUSD, the most recent occurring in February 2024, price was able to recover shortly after. The market cap of TUSD peaked at $3.3bn in October of 2023 and has since declined to $400m. There is very little DEX liquidity for TUSD compared to other assets in the Emergency Collateral Backing.

**Rationale**

The Emergency Collateral Backing should be made up of reliable, liquid and stable assets. Very low DEX liquidity, peg volatility and a large(recent) drop in market cap put into question whether or not TUSD belongs in the Emergency Collateral.

**Risks**

There are no risks removing a questionable asset from the Emergency Collateral Backing.

![Untitled (200 x 200 px) (1)](https://europe1.discourse-cdn.com/flex005/uploads/reserve/original/1X/32dc6bac0030ad32505ec5473e8723bae31d2ae7.png)

_Poll ([view on site](https://forum.reserve.org/t/ip-remove-tusd-from-the-emergency-collateral-backing/905/1))_

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**Author:** ![socopower](https://dub1.discourse-cdn.com/flex005/user_avatar/forum.reserve.org/socopower/32/241_2.png) [@socopower](https://forum.reserve.org/u/socopower)\
**Post date:** [August 29, 2024, 1:50am UTC](https://forum.reserve.org/t/ip-remove-tusd-from-the-emergency-collateral-backing/905/2 "2024-08-29T01:50:27Z")

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💯% agree with this proposal, and GG for those good eyes to detect those small but important details with TUSD.

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**Author:** ![tbrent](https://avatars.discourse-cdn.com/v4/letter/t/bbce88/32.png) [@tbrent](https://forum.reserve.org/u/tbrent)\
**Post date:** [August 29, 2024, 4:04am UTC](https://forum.reserve.org/t/ip-remove-tusd-from-the-emergency-collateral-backing/905/3 "2024-08-29T04:04:37Z")

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FYI this is just a legibility change – TUSD has been unregistered from eUSD asset registry (and therefore unusable) for a long time now. This change would just make that more legible. Still important to do!

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**Author:** ![Raphael\_Anode](https://dub1.discourse-cdn.com/flex005/user_avatar/forum.reserve.org/raphael_anode/32/1100_2.png) [@Raphael\_Anode](https://forum.reserve.org/u/Raphael_Anode)\
**Post date:** [August 30, 2024, 9:37am UTC](https://forum.reserve.org/t/ip-remove-tusd-from-the-emergency-collateral-backing/905/4 "2024-08-30T09:37:14Z")

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Another good cleanup proposal it seems! Thanks, @Sawyer .