A brief look at Stablecoins
Since stablecoins are meant to keep their value constant, they are perfect for lowering market volatility.
CoinMarketCap
Stablecoins are available in various forms, each with its own stability mechanism: fiat-backed, crypto-backed, algorithmic, and commodity-backed.
Stability
Stablecoins are digital assets that are intended to hold their value steadily over time, acting as a dependable medium of trade and store of value.
By lowering volatility, facilitating quick transactions, increasing liquidity, granting financial access, and quickening the adoption of cryptocurrencies, they stabilize the digital economy.
Fiat-backed Stablecoins: USDC, USDT, BUSD and TUSD
Crypto-backed Stablecoins: DAI, LUSD
Algorithmic Stablecoins: USDD, FRAX
Commodity-backed Stablecoins: PAXG (PAX Gold)
Advantages
- Financial transactions on blockchains are demonstrably quicker than those on conventional platforms. With stablecoin transactions, there is no need for a third party to validate the transfer; hence, there are no fees to be paid to third parties.
- Stablecoins maintain the ability of all cryptocurrencies to travel across geographical boundaries.
- Unlike conventional money, transactions involving stablecoins are visible to everyone on a public ledger.
Disadvantages
- To provide a decentralized, anonymous, or reliable experience, third parties with potential conflicts of interest must audit stablecoins.
- Unlike some other cryptocurrencies, stablecoins are generally created by centralized institutions that also possess the money.
- Unpegged cryptocurrencies provide investors with the possibility of large returns on investment, whereas stablecoins do not.
That’s all.
--------------------------------------
Block Traveler HOPP — Link in Bio (includes several NFTs for interaction)
Some of the NFTs in the link are free. Others can be minted for a small fee on different chains if you want to support my work on Medium and interact with one more different contract.
Sample NFTs:
NFT for a small fee on zkSync Era: https://horse-traveler.nfts2.me/
NFT for a small fee on Scroll: https://spacecraft-traveler.nfts2.me/
NFT for a small fee on Linea: https://tiger-traveler.nfts2.me/
Important Notice: This material is not meant to address your specific needs; it is only for your general use and knowledge. In particular, the information does not constitute any form of advice or recommendation. Appropriate independent advice should be obtained before making any such decision.
