Alex Lebed, a blockchain researcher, recently reviewed Gemini dollar, a new stablecoin created by cryptocurrency firm Gemini Trust. Lebed’s code review stated the exchange could freeze Gemini dollar accounts and turn tokens into non-transferrable assets. In Alex Lebed’s post, some centralized features of the stablecoin were revealed.
Alex Lebed is a blockchain researcher as well as the founder of another stablecoin, Stableunit. Stableunit is said to be a decentralized digital currency with low volatility. Lebed reviewed Gemini dollar’s codebase, which was created using ethereum-based smart contract. According to Lebed’s study, Gemini’s existing implementation provides the custodian with the ability to hold any account as well as change tokens so they won’t be transferable.
The digital currency’s custodian has the complete ability to change the token’s implementation every 48 hours. Besides these critical findings, Lebed also detailed his study with plenty of references allowing anybody to corroborate his work. Following that, he reviewed the code then subsequently replicated the results.
With his review, he claimed the custodian of the smart contract of Gemini dollar can create an unlimited number of tokens. According to Lebed, there is a single source of major failure with the Gemini project, and that is the company. Lebed says the company can say one day that they no longer want to change tokens dollars.
Furthermore, Lebed says there is a precedent to this situation in history with what happened in 1971. Lebed is adamant in saying this is not impossible and the features he found disqualifies Gemini dollar as a cryptocurrency. Over the past few months, more and more stablecoins come into the market after the growth of tether.
Many companies right now are in the middle of developing similar digital currency. Even Lebed himself seems to be creating his very own decentralized stable digital currency. After the publication of his editorial review, he noted that Gemini Trust is not exactly hiding the possibility of his claims. Gemini Trust explicitly mentioned evolving smart-contracts and asset-backed token in their whitepaper.
After Lebed’s Gemini dollar review, many cryptocurrency proponents both in social media and Reddit were quick to point out that the company issuing tethers through Omni Layer can also freeze accounts. On the other hand, a Reddit user shares his opinion about the freezing ability of the custodian of Gemini dollar by saying the token is not a cryptocurrency, but merely a database.
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