Stablecoin

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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.


Smart money intensifies its flee to cryptocurrencies, precious metals & commodities from FIAT money

10 Jan 2021 2 minute read 0 comments ircrp

  As the narrative shifts against the FIAT currencies following the intensified period of stimulus & grants caused by economical shutdown through government response to the pandemic almost all around the world, resulting in immense increase of money...

US Govt Gives Banks the go Ahead to Transact w/ Stablecoins. Altcoins Pump as BTC Consolidates

10 Jan 2021 1 minute read 0 comments Aware1

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9 Jan 2021 3 minute read 0 comments GoInvest

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8 Jan 2021 1 minute read 11 comments Abhimanyu Krishnan

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7 Jan 2021 2 minute read 4 comments drluv

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6 Jan 2021 1 minute read 4 comments Abhimanyu Krishnan

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Origin Dollar Relaunches After $7M Hack

6 Jan 2021 1 minute read 0 comments Abhimanyu Krishnan

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US Banking Regulator Tells Banks They Can Use Stablecoins for Payment Activities

5 Jan 2021 1 minute read 7 comments Abhimanyu Krishnan

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OpenDAO Stock and Real Estate Backed Stablecoin Will Launch Soon

2 Jan 2021 1 minute read 2 comments lucasc

UMA Protocol lets developers build synthetic assets - a special kind of digital token which follows the price of some other valuable asset. For the last 3 months, they've run a Yield Dollar to mint based on collateral with a time limit. They represen...

BUSD has been the most powerful stablecoin in 2020

1 Jan 2021 1 minute read 0 comments Makingdigital

Stablecoins have seen unstoppable growth this year 2020. Although USD Tether remains the most dominant, BUSD undoubtedly represents the lead. Usd Tether has increased its market capitalization by more than $ 12 billion. The pandemic that has characte...