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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.
5 Aug 2022 2 minute read 0 comments Equilibrium
Using illiquid assets as collateral poses significant risk to the money market and the long term sustainability of the Equilibrium protocol. Polkadot is only preparing for the major lift off and many of its parachains still have low utility and low...
4 Aug 2022 5 minute read 8 comments Cje95
While the House is on its August break the Senate has been in session continuing to make waves in the crypto space. The different pieces of legislation that have been introduced and the others which have been discussed range from very line item speci...
3 Aug 2022 2 minute read 2 comments ssaurel
Stablecoins have been going through a particularly difficult time in recent months. The current Bear Market has brought to light the bad practices of some and even the scams that the Bull Market may have previously masked. Since the collapse of the U...
29 Jul 2022 3 minute read 1 comment Cje95
Over the last week or so a lot has been made out about the two different bipartisan pieces of legislation. In a move that was interesting to me each chamber, the Senate and the House had one piece of legislation that was the recent focus of attention...
28 Jul 2022 6 minute read 0 comments Chill Music Organization
As crypto assets become more mainstream, the IMF has highlighted the potential risks that stablecoins pose. These risks range from an increase of four times the supply of stablecoins by 2021 to a disruption of the market's financial stability. These...
27 Jul 2022 4 minute read 0 comments Cje95
Last week while I was attending the Meritocracy: America Innovation Forum I listened in to a talk by two members of Congress about a stablecoin bill that was supposed to drop that day (if you have not read it you can find it here). Instead of the Rep...
23 Jul 2022 5 minute read 6 comments Pantera
MtGox Creditors Repayment Is Just Days Away! Imagine being forced to “hodl” Bitcoin for eight years, watching the market volatility and the new Bitcoin ATH. Knowing you possess life-changing wealth but not having the option to move or use it. This is...
21 Jul 2022 3 minute read 3 comments Cje95
Today is the Meritocracy: America Innovation Forum and I was lucky enough to be invited to participate in it. This forum is going to last all day and has several members of Congress from both parties speaking along with leaders in both the Biden Admi...
21 Jul 2022 2 minute read 0 comments Michael @ CryptoEQ
If you want more cryptocurrency analysis, including full-length research reports, trading signals, and social media sentiment analysis, use the code "Publish0x" when subscribing to CryptoEQ.io to make your first month of CryptoEQ just $10! Or simply...
20 Jul 2022 1 minute read 0 comments idiosyncratic
Stablecoins are useful cryptocurrencies that accelerate Decentralized Finance adoption while providing several advantages for crypto investors to hedge their portfolios; assess the value of digital assets and use as digital currency. As expected, th...
