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.


SVB shutdown sparks USDC depeg, highlighting DeFi risks

13 Mar 2023 1 minute read 0 comments FKlivestolearn

Although the damage has been contained for now, it shows how liquidity conditions can rapidly deteriorate across the board On Friday, March 10th, regulators shut down Silicon Valley Bank (SVB), marking the largest bank failure since the global financ...

Stablecoins and How They Work?

13 Mar 2023 2 minute read 0 comments mercurial9

I have been catching up on the weekend news, and it's all been about the potential collapse of Silicon Valley Bank (SBV) and its ramifications on the global and crypto markets. When most people think about cryptocurrencies, they picture a highly vola...

Your Sunday Dose of Crypto Memes

12 Mar 2023 1 minute read 2 comments RocketEnthusiast

What it is, P0x'ers! Another week gone by, another ripple from the FTX collapse has risen. This time USDC has come unpegged, and it's not looking too good as of this writing. It's such a fluid situation that unless you follow it in real time, you wil...

Multiple Stablecoins Depegged

12 Mar 2023 1 minute read 19 comments Yugocean

The value of multiple stablecoins—DAI, USDC, USDD, and FRAX—unexpectedly dropped below 95 cents together; despite some regains, their value is still not pegged. Describe DAI USDC  USDD & FRAX DAI, USDC, USDD, and FRAX are all US dollar-pegged stabl...

All eyes are on USDC-USDT, but no one talks about these stablecoins?!

7 Mar 2023 4 minute read 3 comments Krzamake

Do we all know what are stablecoins?! By its definition, stablecoins are a special class of digital currency that are created by private companies and transferred using blockchain and distributed ledger technology. Stablecoins are typically anchored...

SEC Hunts Stablecoins

5 Mar 2023 1 minute read 0 comments idiosyncratic

The FUD over BUSD the stablecoin that Paxos print as a service provider for Binance has just started to settle down. Some credible rumors said the problem with BUSD will also hit USDC Circle if it goes like that. BUSD, USDC, and USDT are the central...

Cardano Project: USDA And Djed Stablecoins

3 Mar 2023 2 minute read 4 comments SimpleSwap

Stablecoins are the only digital assets with high exchange rate stability. Due to their binding to fiat, they allow users to control price fluctuations, fix profit and loss indicators. Recently, in the cryptocurrency ecosystem, it became popular to d...

Who Lies? Forbes Vs Binance

1 Mar 2023 1 minute read 3 comments Bfab

According to Forbes: Binance transferred $1.8 billion in stablecoin collateral to hedge funds, including Alameda and Cumberland/DRW, leaving its other investors exposed. CZ, the CEO of Binance, responded as follows: I am reluctantly spending time...

FT Crypto watch Feb 24 WEEKEND

25 Feb 2023 6 minute read 13 comments Dave Sawyer

Cryptonauts - WE LOVE YOU!! but the FT does most decidedly NOT!!  The mighty watch army rolls out on the FT weekend today.  The chess problem is great, there's an article on famous crossword setters... and absolutely butkis on crypto.  The ICE cold s...

How Djed Works: Cardano's Algorithmic Stable (Ada And Shen)

23 Feb 2023 3 minute read 4 comments ☑️0🆇D̺͈͙͕̿ͧ̑ͣ🅰🆅🅸🅳eͤ

I'm not a fan of Cardano, however I tried to study the functioning of its algorithmic stable Djed.Even if little used, there are 3 stablecoin on Cardano, 2 of which are active. Ausd is an overcollateralized algorithmic stablecoin, Usda is collaterali...