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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.
20 Jul 2022 4 minute read 5 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 5 minute read 0 comments FKlivestolearn
Visualizing the performance of different segments of the crypto market at the end of the second quarter While the first half of the year and the second quarter specifically have brought a lot of pain for the crypto bulls, the third quarter is shaping...
19 Jul 2022 6 minute read 2 comments Equilibrium
The global crypto market has lost two-thirds of its value from its November all-time high of $3 trillion to $1 trillion. And from November, when Bitcoin reached its all-time high of $69,000, it lost 70% of its value. This instability and volatility m...
13 Jul 2022 1 minute read 0 comments Eshwar ;)
Coins with full counterparty risk, such as USD Coin, DAI, and binanceUSD, saw their prices rise during the trouble as panicked investors sought refuge in a more secure currency. Others believe that stablecoins will never be completely secure. The vol...
10 Jul 2022 5 minute read 0 comments Heath Muchena
What is a Stablecoin? Stablecoins are a type of cryptocurrency that tracks real-world assets, like the U.S. dollar or Euro. Due to the volatility in the cryptocurrency market, investors sometimes need to park their funds in a stable asset. Stablecoin...
6 Jul 2022 3 minute read 3 comments Dzoelx
Source Commodity-backed stable coin projects are having a good time currently. The big argument used to be how Tether is backed ‘by air’ and should be cracked down. Taking a look at it again, it’s amazing how it managed to retain its dollar peg to da...
5 Jul 2022 3 minute read 2 comments ☑️0🆇D̺͈͙͕̿ͧ̑ͣ🅰🆅🅸🅳eͤ
Almost 2 month ago, Ust lost the peg with the dollar. Terrausd is an algorithmic stable which should have maintained its stability through arbitrage incentives. There are different types of stablecoins, each based on a different operating mechanism a...
4 Jul 2022 6 minute read 4 comments Swapzone
Bitcoin and other cryptos have several benefits to offer investors and traders, and users and that include making transactions openly with no trust issues or the need for a third-party intermediary. However, the wild volatility of these cryptocurrenc...
3 Jul 2022 1 minute read 8 comments PVM
TL;DR: Governance tokens with no value accrual mechanism for their holders are zero-sum games with weak tokenomics. With Inverse Plus, Inverse opens a new DeFi category of positive sum tokens which return value directly to tokenholders. Are you tir...
2 Jul 2022 3 minute read 0 comments 2sats
*obligatory not financial advice* What is 1Beam? 1Beam is a decentralized exchange on the Moonbeam blockchain that has its focus on swaps between different stablecoins. Moonbeam is a smart contract blockchain that is part of the Polkadot network. T...
