Stablecoins provide needed stability in the volatile cryptocurrency ecosystem. Therefore, Stablecoin projects are very important to the entire crypto ecosystem. Most stablecoins are usually pegged at USD to 1-1, but some are having some issues with the USD peg feature.
What is a stablecoin?
Stablecoins are expected to be resistant to sudden price movements. Therefore, the value of such cryptocurrencies is often indexed to the price of a physical asset. The physical asset most stablecoins are indexed to is the US dollar. However, there are also stablecoins that are indexed to the price of other cryptocurrencies or commodities such as physical gold and silver. In addition, stablecoins provide other benefits such as privacy, security, and fast cross-border transactions. Stablecoins are divided into two as collateralized stablecoins and unsecured stablecoins.
Collateralized stablecoins, the assets to which they are indexed are stablecoins held by the company. For example, PAXGold (PAXG) is one such stablecoin. In other words, the Paxos company holds physical gold equivalent to the PAXG token in the market. There are also stablecoins indexed to cryptocurrencies. The companies issuing them can hold an equivalent amount of the corresponding cryptocurrency. Such stablecoins are called crypto-collateralized stablecoins. Stablecoins that use algorithms that control the token supply to keep the price at a certain level are called unsecured or unsecured stablecoins. Such stablecoins are also referred to as algorithmic stablecoins. Unsecured stablecoins do not use any reserves. We can cite Terra USD (UST) as an example of such a stablecoin. At Kriptokoin.com, we review the best and most durable stablecoins.
Here are the 5 most durable stablecoin projects on the market:
Tether (USDT)
Tether (USDT) is the most popular stablecoin available today, backed by the US dollar. The stablecoin is usually pegged 1-1 with the dollar and is known for its stability and security. Interestingly, USDT is the largest stablecoin in circulation and by market cap. Tether is also currently available on top networks such as Ethereum, Tron, EOS, Algorand, Bitcoin Cash and Liquid. USDT currently has a market cap of $82.8 billion and a 24-hour trading volume of $167.1 billion.
USD (USDC)
USD Coin (USDC) is also a fiat-backed stablecoin. It is backed by $1 – $1 and is a reliable bridge between the fiat ecosystem and crypto exchanges. As an ERC-20 token, it is compatible with most wallets and crypto storage platforms available today. Also, USDC is the second largest stablecoin available today. He is also a major supporter of Coinbase USD coin. USDC currently has a market cap of $49.2 billion and a 24-hour trading volume of $29.3 billion.
Binance USD (BUSD)
Binance USD (BUSD) is a Stablecoin issued by Paxos in partnership with popular crypto exchange Binance. It is also backed by $1 – $1 and certified by the New York State Department of Financial Services (NYDFS). BUSD is backed by reserves held in US insured banks and Treasury bills. BUSD currently has a market cap of $16.9 billion and a 24-hour trading volume of $23.4 billion.
DAI (DAI)
DAI stablecoin is the native cryptocurrency of the Maker protocol and a crypto-collateralized stablecoin Has a 1-1 associate relationship with the US dollar . However, DAI uses cryptocurrencies instead of fiat currency to support this, and for this they use smart contracts, not reserves or financial institutions. DAI has a market cap of $5.9 billion and a 24-hour trading volume of $3.9 billion. Also, the circulating supply currently stands at 5.9 billion tokens.
TerraUSD (UST)
TerraUSD (UST) is a decentralized and algorithmic stablecoin pegged to the US dollar by Terra (LUNA). However, compared to other stablecoins, UST is not backed by any assets. Instead, printing 1 UST requires burning a LUNA for $1. Prior to this week, UST was one of the fastest growing stablecoin options available. Co-Founder Do Kwon even announced plans to displace the DAI stablecoin in an effort to further strengthen the UST. However, this is no longer the case as the stablecoin continues to struggle to stay tied to the dollar. Do Kwon has released plans for the next course of action to use the stablecoin. Also, according to Kwon, the best course of action is to absorb the current stablecoin supply.
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