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A stablecoin is a digital token that is pegged to a certain value, usually in a 1:1 ratio with a fiat currency like the US dollar. For example, the USD Coin (USDC) launched by Coinbase is backed by US Dollars in a 1:1 ratio. Most stablecoins in reality deviate from the $1 position ever so slightly, 

Most stablecoins are pegged to a fiat currency, with the US Dollar being a popular choice. However, some stablecoin ventures distinguish themselves by backing their stablecoins with other assets. 

An example of this kind of stablecoin is the well known MakerDAO ecosystem, which is a stablecoin ecosystem that consists of two tokens: the stablecoin DAI and the governance/utility token MKR. The stablecoins are backed by Collateralized Debt Positions which demand Ether as collateral. There is a complex mechanism in place to ensure that the token does not deviate from the $1 value.

Stablecoins have been ascending in popularity in discussion in 2019. This is largely because there is some consensus in the idea that stablecoins are effective in combating the volatility of the market. Since the value of these tokens remain stable, investors who use stablecoins do not have to worry as much about bear markets, and can use these tokens to make investments during these bear markets to gain profit.

As most stablecoins are pegged to fiat currency, there has been scrutiny on the finances of stablecoin issuers, who must confirm that they possess the reserves to back the total value of stablecoins. This increased scrutiny has led to calls for more audits and better transparency.

Here’s What You Need to Know About Central Bank Digital Currency

11 hours ago 5 minute read 0 comments Hodlnaut

Central bank digital currencies (CBDCs) are digital tokens, similar to cryptocurrency, that are issued by a central bank. They're used for payments and transfers much like regular money and are typically pegged to the value of that country's fiat cur...

Algorithmic Stablecoin and what happened to TERRA's UST

23 hours ago 5 minute read 2 comments Destiny_

Most of us are aware with the term "Inflation". Inflation is decrease in purchasing power of money. In layman terms, if you can buy an apple for a dollar today and the inflation rate is 5%, then you will need to pay $1.05 next year for the same apple...

Crypto Project Types

21 May 2022 7 minute read 0 comments Simple Like 1

 Photo by Brett Jordan on Unsplash Currencies, Memes, DeFi, Metaverses, Oh My Introduction Initially, crypto as a field was kickstarted by Bitcoin. This was meant to be a decentralized currency that was governed by code execution in a distributed com...

Which is the safest stablecoin?

21 May 2022 2 minute read 1 comment FunFavst

Nothing in this life is certain, much less in the world of cryptocurrencies, but when it comes to investing, and earning interest with the capital you obtain in an exchange or the like, you always choose one that generates confidence.   For those who...

How To Earn 60% APR On USDD Stablecoin With Kucoin: A Review & Tutorial

20 May 2022 4 minute read 8 comments Cryptoindulgence

An Overview of Kucoin Launched in 2017, Kucoin is one of the largest cryptocurrency exchanges by daily spot trading volume, with over 18 million users in 200 countries and regions. The home of hidden gems, Kucoin’s recent rise in popularity is attri...

(Un)Stable Coins - Under Pressure

20 May 2022 2 minute read 0 comments Steve Hodl

The latest speculations are that the BTC reserves were not used by Terra to maintain the peg but were in fact sent to a cold wallet is the latest blow to UST/Luna bagholders.source The fallout of the collapse of Luna and UST has now got the whole cry...

Why Stablecoin Selection Matters.

19 May 2022 3 minute read 2 comments CryptoChad

  The UST de-pegging has shown one thing; not all stablecoins are safe and our selection is vital. Even if they remain stable for a long time they can still show volatility which can mainly be attributed to the coin's code and functions. Do we need t...

DAI Is The Future, Aave V3 and Rethinking Risk

18 May 2022 1 minute read 0 comments InsideCrypto

Hey DFI(Defi) people… How are you holding up? I think we can certainly say we are in the crypto “winter” stage of this current cycle or bear market. This is the sixth episode of our Defi focused segment of the Inside Crypto podcast. In this series we...

How Safe Are Stablecoins Part 1 – Fiat-Collateralized Coins

17 May 2022 7 minute read 6 comments Scott Cunningham

The questions we aim to answer in this series on stablecoins are how safe and how stable are stablecoins? In this espied, we’ll take a look at several examples of fiat-backed collateralized stablecoins like USDT, TUSD, BUSD, USDC, and more. https://...

Crypto and the Law: While regulators clamor, Do Kwon proposes LUNA hard fork

17 May 2022 7 minute read 5 comments I-HODL

Regulators around the world are evaluating the aftermath of Terra's UST/LUNA and weighing in with renewed calls for greater supervision. And even as at least one South Korean politician calls for a hearing on the crisis, Terra creator, Do Kwon, is ba...