Q: Who is the team?
A: Vault has attracted talent from top schools and employers including Yale, Wharton, JPMorgan, Morgan Stanley, Goldman Sachs and Deloitte and has formed strategic partnerships with top legal and consulting firms in each of the relevant jurisdictions of operation.
Additionally, Vault complements the core talent of its team with outside advisors and select advisory firms with a proven record in launching successful cryptoassets.
Q: What is USDVault?
A: The first token to be issued on the Vault platform is called USDVault.
It is the first stablecoin pegged 1:1 to the US Dollar, backed by and redeemable for gold stored in Swiss vaults and is backed by a comprehensive gold vaulting and purchasing process with a fully compliant, audited and transparent verification and ledger system.
Q: Who will use USDVault?
A: Vault foresees many end uses for our stablecoin. Below we have highlighted a few.
Providing an entry and exit point for institutional investors. USDVault provides an entry point into cryptocurrency by giving investors a dollar-stable product from which they can control the timing and flow into other cryptocurrencies.
As well as being significantly more volatile than traditional capital markets, cryptoassets have exhibited a high correlation with each other. USDVault will serve as a portfolio management tool in the sense that it will allow holders of different cryptocurrencies to reduce their exposure to the volatile market and gain the stability of an instrument that is pegged to the US dollar.
USDVault will allow traders to crystallize gains or park funds during periods of instability without exiting the cryptocurrency market. The ability to gain stable exposure to the US dollar without the need to exit the crypto market will appeal to a wide range of investors. Additionally, USDVault brings the possibility of redeeming the tokens into gold if a definite exit from the cryptomarkets is required without ever entering into fiat currencies.
As cryptocurrency achieves mainstream adoption, we foresee that merchants will prefer to accept stable currencies versus less stable alternatives. For buyers and sellers of any product or service, knowing how much they are paying or receiving is an important consideration. The extreme volatility of most cryptocurrencies has made the adoption of cryptocurrency as a practical medium of exchange difficult. Vault foresees that a 1:1 USD pegged stablecoin will be the preferred form of payment from amongst cryptocurrency payments.
Global access to US dollars. It is not something most in the developed world would consider but during times of unrest and political instability, concerns over the long-term viability of the local currency and the security of deposits in financial institutions becomes a major consideration for people around the world. Local regulations or in extreme cases a mass exodus from the local currency make purchasing US dollars difficult or impossible. USDVault will provide millions with a level of financial security and stability unseen throughout history.
Q: Which exchanges will USDVault be listed on?
A: It will always be possible to purchase and redeem USDVault tokens through Vault. Additionally, the team is in the process of forming partnerships with key exchanges and will announce exchange partnerships in coming months. As well, services such as Shapeshift and Changelly will allow users another route to exchange their coins for other cryptocurrencies.
Q: How can I buy USDVault tokens?
Q: Will USDVault tokens be classified as securities?
A: Vault Technologies has partnered with a reputable law firm in Canada and it’s their legal opinion that USDVault is a Principle Protected Note or PPN. This means that USDVault will not be considered securities by the Ontario Securities Commission.
Q: What are the fees?
A: Vault will charge 3 types of fees directly to the users, calculated as follows:
- Creation Fees (0.10%): Vault charges the user an issuance fee equivalent to 0.10% of the dollar value of the purchased coins.
- Redemption Fees (0.10%): When the user redeems the coins, Vault charges 0.10% of the redemption dollar value.
- Vaulting Fees (0.50%): Vault charges a 0.50% vaulting fee at fixed intervals to cover the costs of vaulting LBMA gold bullion is the Swiss Vaults.
- Transaction Fees (0.10%): at the time of launch and for the foreseeable future Vault will not charge a transaction fee. However, Vault reserves the right to implement a transaction fee in the future.
Q: Why US Dollars? Do you plan to offer other currencies?
A: The US Dollar is the world’s standard exchange currency for most international trading and is used by multiple central banks as the reserve currency of choice. As such, the first coin to be launched on the Vault Platform will be USDVault, which is pegged to the US Dollar, and the Vault team will eventually launch other stable cryptocurrencies pegged to other FIAT reserve currencies (including but not limited to Euro, Yen, and others).
Q: Why use gold to back USDVault instead of fiat or commodities?
A: Scalability in fiat-backed stablecoins has proven difficult as most reputable banks are unwilling to hold large sums of crypto linked money. This has been evidenced in the cases of leading stablecoins which were required to move their bank accounts jurisdictions with less financial banking oversight and less stringent regulatory frameworks, exposing their users to significant counter-party risk in the process.
By instead using LBMA gold bullion, Vault is able to achieve full backing without exposing our ecosystem to the conventional banking system and commensurate counter party risk. Additionally, the LBMA gold bullion market has sufficient depth to scale in size almost without limits while avoiding the issues of holding large sums of cash in liquid accounts.
Q: Are you trying to compete with algorithmic stablecoins like Basecoin or MakerDAO?
A: No. We believe that algorithmic stablecoins are an incomplete answer. Market pressures could force the value of these coins either above or below their desired peg, in this case a 1:1 peg with the US dollar. Without being fully backed, these coins use a means of creation and burning of the coin supply to adjust the price back to the desired peg. As such, the dependency on unproven processes and algorithms does not sufficiently guarantee price stability. Instead, the USDVault approach is to be fully backed by and redeemable for gold, and giving token holders a legal claim to the underlying bullion.
Q: How is USDVault different from leading fiat backed stablecoins?
A: Although USDVault token price is pegged to the US dollar as leading fiat backed stable coins prices are, our key differentiator is that USDVault is backed by actual physical LBMA gold bullion. This brings multiple benefits for USDVault holders – and for the whole surrounding ecosystem – such as:
Gold has provided a stable backing for global markets from ancient times into the 21st century. In every civilization which has had access to it, gold has acted as a steady store of value, especially during periods of uncertainty or instability. Today, gold still plays an important role in financial markets. It is trusted by investors worldwide as a “flight to safety.”
Furthermore, the opportunity for direct redemption from USDVault into gold offers investors the opportunity of transacting directly into gold bullion, should they wish to avoid conversion into fiat currency, while still remaining compliant with the industry-wide AML/KYC measures.
Q: How will you maintain price stability for USDVault?
A: USDVault will always be redeemable through Vault Technologies for $1 USD or the equivalent amount in LBMA gold bullion. This will allow market participants to engage in arbitrage activities which will act to ensure price stability.
As such, a trader could either buy USDVault when it is below $1, say 99₵, and then exchange that coin directly with Vault Technologies for $1 or when USDVault is trading above $1, say $1.01, a trader could buy a token directly from Vault Technologies for $1 sell on the open market for a profit. In both situations the trader made a riskless profit of 1₵.
Other stabilizing factors will include our own market making activities which will allow Vault to maintain price stability on exchanges.
Q: Do I have to go through the KYC/AML process?
A: Yes, KYC and AML validation is performed prior to all token issuance, and also prior to all redemptions.
Q: How do I know my funds are secure when I wire them to fiduciary?
A: The transfer occurs directly from a customer’s bank account to the escrow accounts managed by the fiduciaries we have partnered with. Vault’s principal fiduciary partner, Prime Trust, operates in the US and is therefore required to operate within all relevant state and federal jurisdictions.
Furthermore, Vault has formed partnerships with industry leading precious metals transportation and storage partners, ensuring that all LBMA gold bullion purchased is fully insured at all times, unlike cash deposits in traditional banks which under the FDIC are insured only up to certain limits.
As additional security features, we have a two-layer verification process. Fiduciaries, as the first layer, participate verifying the quantity of gold that is being held in the vaulting facilities. The second layer of verification will be performed by leading independent third-party auditors that will certify the amount of LBMA gold bullion in gold vaults and the value of the gold hedges.
These processes allow the holders of USDVault to validate not only that all funds have been received by fiduciaries, but also that their coins are properly backed as verified by regular professional audits.
Q: Why do you use escrow accounts and banks?
A: Escrow accounts managed by licenced fiduciaries provide the USDVault ecosystem with transparency and a legal claim on the underlying asset backing the coin, in this case LBMA gold bullion. Further, they ensure that the assets and gold will be managed by regulated financial professionals and that Vault will not have direct access to customer funds.
Q: How is gold storage managed?
A: The physical LBMA gold bullion is secured in vaults in Switzerland that are fully insured by world leading precious metals vaulting and transportation companies. Furthermore, Switzerland’s stable democratic political system, long history of neutrality, and economic relationships mean it is considered one of the safest and most secure places to store precious metals.
Q: Why Hedging?
A: Gold has price volatility like any currency. We eliminate this price volatility with a high-quality hedge that will counteract fluctuation in gold prices to maintain a stable peg to the US dollar.
Q: How can I redeem my USDVault coins?
A: To redeem for either US dollars or gold, relevant KYC and AML documents will need to be sent to our fiduciaries, and upon approval USDVault coins can be sent to Vault for redemption.
Upon receipt of the tokens, Vault’s fiduciary partners can issue the equivalent quantity of gold bullion or fiat currency, depending on customer preference.
Q: How can I buy USDVault coins?
A: Vault works with the licensed fiduciaries who manage your funds directly. After passing KYC and AML checks, and signing the required escrow agreement, you will send funds directly to our fiduciary partner. Upon receipt of funds by the fiduciary, our automated processes will issue the equivalent USDVault coins to your ERC20 wallets.
Q: How is gold audited?
A: Vault has engaged highly reputed third-party auditors to perform monthly audits of the gold held in the fiduciary-controlled Swiss vaults. These reports will be published on the Vault company website.