Example

Sazmining Podcast Episode 8: Rafael Cosman on Stablecoins and DeFi

Will Szamosszegi & Rafael Cosman

Table of content

Example

In Episode 8 of the Sazmining Podcast, host Will Szamosszegi sits down with Rafael Cosman, the CEO and co-founder of TrustToken, to dive deep into the rapidly evolving world of stablecoins and decentralized finance (DeFi). What unfolds is a fascinating discussion that ranges from the mechanics of stablecoins to the design of trustless, uncollateralized lending protocols and the future of money itself.

This blog breaks down the most valuable insights from the episode and explores how TrustToken is leading the charge in making decentralized finance safer, more inclusive, and more scalable. Whether you’re new to crypto or a seasoned DeFi builder, Cosman’s perspective offers a roadmap to the future of digital assets.

The Rise of Stablecoins: Why They Matter

Stablecoins are a pillar of the cryptocurrency ecosystem. As Cosman points out, they are responsible for a significant chunk of trading volume across crypto exchanges, often serving as the backbone for liquidity and price stability in volatile markets.

A stablecoin is a cryptocurrency pegged to the value of a fiat currency, like the U.S. dollar. Popular examples include Tether (USDT), USD Coin (USDC), and TrustToken’s own TrueUSD (TUSD). The appeal is clear: users want the advantages of crypto—fast transfers, global access, and decentralized custody—without the stomach-churning volatility.

Cosman shares how his journey to founding TrustToken began in an unexpected place—estate planning software. After seeing the astronomical growth of Tether (which had reached $1 billion in market cap at the time), he and his team saw a massive opportunity to build a better version: a compliant, trustworthy stablecoin.

Why Trust and Transparency Are Game-Changers

TrustToken’s TrueUSD differentiates itself by putting transparency front and center. Cosman explains that unlike Tether, which has faced years of criticism for lacking full audits, TrueUSD became the first stablecoin to implement 24/7 real-time attestations of its reserves.

TrustToken partners with a top U.S. accounting firm to provide real-time proof of USD reserves.
This data is hosted externally and verifiably, offering unmatched transparency.
The company is also working with Chainlink to bring this data on-chain via Oracles, enabling DeFi protocols to programmatically verify collateralization in real-time.

This move sets a new bar for accountability in a sector that desperately needs it. For institutional players and high-stakes DeFi applications, such transparency isn’t just a bonus—it’s a requirement.

Diversifying the Stablecoin Market

One of the episode’s key takeaways is that the dominance of USD-backed stablecoins is just the beginning. Cosman envisions a future where users can hold and trade stablecoins pegged to various global currencies, such as:

TrueAUD (Australian Dollar)
TrueCAD (Canadian Dollar)
TrueGBP (British Pound)
TrueHKD (Hong Kong Dollar)

This opens up enormous potential for non-U.S. users to more easily access and operate within the crypto economy. Imagine buying Bitcoin in Australia and seeing your balances and trades denominated in AUD—not USD.

Stablecoins backed by multiple fiat currencies can unlock crypto adoption in emerging markets and make DeFi more localized, accessible, and intuitive for billions of people around the world.

Introducing TrueFi: DeFi Lending Without Collateral

Perhaps the most groundbreaking portion of the conversation revolves around TrueFi, TrustToken’s new protocol that enables uncollateralized lending in DeFi.

Traditionally, DeFi lending platforms like Aave, Compound, and MakerDAO require over-collateralization. Borrowers must deposit crypto worth more than the loan they want to take out—often 150% or more. While this reduces risk, it also severely limits the addressable market.

TrueFi changes the game by introducing credit risk and reputation into decentralized lending. Here’s how it works:

Lenders deposit stablecoins (like TUSD) into a lending pool.
Borrowers apply for loans, stating amount, term, and interest rate.
TrustToken holders vote to approve or reject loan applications.
If approved, the borrower receives funds and repays with interest.
Yes-voters are rewarded, but if the loan defaults, their staked tokens may be slashed.

By shifting from asset-backed to reputation-based lending, TrueFi creates a decentralized version of traditional credit markets. It’s a bold step toward bringing institutional-grade capital efficiency to DeFi.

Decentralized Risk Assessment: Incentives by Design

The voting mechanism in TrueFi is a prime example of game theory applied in finance. Token holders are incentivized to vote wisely, since their economic rewards (or losses) depend on the outcomes of the loans they approve.

Stakeholders who approve good loans are rewarded with bonus tokens.
Those who back defaults get penalized via token slashing.
Over time, this filters out bad actors and concentrates voting power among more reliable participants.

This incentive structure turns every trust token holder into a decentralized loan officer. And unlike centralized underwriters, this system is global, scalable, and open to anyone.

Real-World Use Cases and Early Traction

TrueFi is launching with a small group of highly reputable borrowers—crypto funds with proven track records and hundreds of millions in assets under management. This conservative rollout allows the protocol to establish credibility and iterate quickly.

Meanwhile, TUSD has seen impressive adoption. After its launch, much of its early growth came from listings on major exchanges like Binance and OKEx. More recently, its integration with DeFi protocols like Curve Finance has driven significant traction—helping the stablecoin reach a market cap of over $300 million.

Cosman credits this growth to DeFi itself, noting that stablecoins are the primary assets being used in protocols like Compound and Aave.

In fact, a staggering 93% of borrowed assets on Compound and 92% on Aave are stablecoins. This data underscores the fact that stablecoins aren’t just a nice-to-have—they’re the core financial primitives of DeFi.

What Happens When Governments Launch Digital Currencies?

Cosman is optimistic but realistic about the advent of central bank digital currencies (CBDCs). While China may move quickly, he doubts the U.S. will issue a digital dollar anytime soon, citing bureaucratic inertia.

Even if government-backed stablecoins emerge, he believes there’s still a strong use case for private issuers like TrustToken. Why?

Flexibility: Companies can move faster and innovate more rapidly than governments.
Multi-currency approach: TrustToken is already building stablecoins for multiple fiat currencies, not just USD.
DeFi compatibility: Projects like TrueFi are already integrated into the decentralized ecosystem, while CBDCs will likely be slower to adopt open standards.

CBDCs might offer fiat stability, but platforms like TrustToken offer composability, accessibility, and global reach.

The Bigger Picture: Where DeFi and Stablecoins Are Headed

Cosman outlines two key trends that will define the next phase of stablecoin and DeFi adoption:

1. From Overcollateralized to Uncollateralized Lending

Uncollateralized lending unlocks massive new use cases. It allows individuals and institutions to borrow without tying up large amounts of capital, leading to greater capital efficiency and broader access to credit.

2. Multi-Currency Stablecoins Powering a Global DeFi Ecosystem

The dominance of the U.S. dollar in crypto won’t last forever. As users demand local-currency access to crypto tools and markets, a broader stablecoin landscape will become essential. This will drive the next wave of DeFi protocols tailored to regional needs.

DeFi for the Masses: The Path to Mainstream Adoption

Cosman believes crypto will eventually become invisible infrastructure—just like TCP/IP underlies the internet. The average user won’t need to understand blockchains to benefit from them. Instead, they’ll see:

Higher interest rates on their savings (e.g., 2–5% instead of 0.01%)
Faster and cheaper transactions
Decentralized apps embedded into mainstream platforms like PayPal or Square

As protocols like TrueFi continue to prove themselves stable and solvent over time, they’ll earn the trust required to support this mass adoption.

Bitcoin vs. Stablecoins: Different Roles, Same Revolution

While Bitcoin often dominates headlines, Cosman suggests that stablecoins might be even more important for everyday use. Bitcoin may serve as digital gold, but stablecoins are digital dollars—far more practical for spending, saving, and lending.

In his view, a future monetary ecosystem will include:

Purely digital assets (e.g., Bitcoin, ETH)
Tokenized real-world assets (e.g., TUSD, trueGBP)
DeFi protocols offering yield, credit, and financial services

This hybrid model offers both decentralization and usability—something no single asset can provide on its own.

Final Thoughts: A Rational Approach to the Future of Finance

Rafael Cosman’s perspective isn’t just technically brilliant—it’s grounded in pragmatism. Rather than promising overnight disruption, he advocates for steady, reliable performance as the key to building trust.

As he puts it, “Every day that goes by where stablecoins remain stable and DeFi protocols don’t lose anyone’s money, we earn more trust. And that trust will win over the world.”

In a sector defined by volatility and speculation, that’s a message worth repeating.