Stablecoin - News, Opinion & Analysis

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.


Why I Think Everyone Should Have a Piece of MakerDAO ($MKR)

10 Jul 2019 2 minute read 7 comments kevW!ls0n

So I think it’s pretty clear that by now investors who are really into the market should get into at least one stablecoin. A lot of people have chosen to go into Tether (WHY?), maybe because that’s the easiest or most noticeable option but c'mon, ser...

4 Most Important Crypto News You Should Know Today (19 Sep 2019)

19 Sep 2019 4 minute read 2 comments Brawnd0

As we head into the last quarter of 2019, a year which has seen significant improvement in the fundamentals of the market, a lot continues to happen that has crypto enthusiasts hopeful for the prospects of a great bull run in 2020. We are halfway to...

The Digital Currency Race Heats Up

14 Dec 2019 2 minute read 6 comments tabul8tor

Facebook’s Libra Photo by Alex Haney on Unsplash On 18 June 2019, Facebook, the world’s largest social network, announced a cryptocurrency called Libra which would be a stablecoin backed by a basket of currencies weighted towards the U.S. dollar. Li...

An Introduction to Stablecoins and Why They are Important to Your Portfolio

2 Dec 2019 6 minute read 4 comments cam_elica_24

Since their inception, cryptocurrencies have been revolutionary in every sense of the word. For many crypto enthusiasts, crypto is the future of money and will finally break us free from the illusion of control that centralized institutions have sewe...

The Stablecoin Solution - Why Stablecoins are the Key To Crypto Adoption

24 Nov 2019 5 minute read 9 comments The Part Time Economist

One of the very first things that I learned in my Monetary Theory courses was that money is a “stable medium of exchange” that functions as a “store of value”. In other words, money allows us to receive payment for something today, hold the money, an...

Stable Coins Don't Exist

12 Aug 2019 4 minute read 12 comments viraladmin

It's a term we hear and use all to often in cryptocurrency - stable coin. The truth is, however, in the history of man's monetary systems there has never once been a stable coin. The term stable coin is a complete misnomer and is actually the opposit...

Multi-Collateral Dai Starts Monday - Here's What You Need to Know

14 Nov 2019 5 minute read 4 comments The Part Time Economist

On the 18th of November, MakerDAO will be launching the new and improved Multi-Collateral DAI. For those of you who aren't familiar with Dai, it is one of the leading stable coins and is "minted" when users lock ETH into a collateralized debt positio...

8 Beginner Questions About Stablecoins Answered

26 Nov 2019 3 minute read 4 comments The Part Time Economist

In response to one of my recent articles, a reader asked for a more in-depth explanation of what stablecoins are and how they work. As I thought about this question, I realized that sometimes it is good go get back to basics and that many people may...

4 Things You Probably Missed About MakerDAO (MKR) and DAI In June 2019

8 Jul 2019 1 minute read 1 comment Ed-california

It’s been an interesting week for cryptocurrencies, with the market going down a bit from its high last week. Things look stable. Stablecoins, of course, remain stable regardless, more or less.  And I’m not talking about Tether, oh God no. I’m talki...

The good side of Libra

12 Oct 2019 1 minute read 6 comments raven

My last post about Libra had a tone of criticism. As many others, I am wary of Facebook (for many reasons) and I think Zuckerberg is much too sly. But I don't want to enter in politics here, so let's talk about some possible positive aspects of Libra...