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An overview of the top five stablecoins in Ethereum DeFi



A stablecoin is a cryptocurrency created to reduce the volatility of the price of a token, which can be pegged to a currency or exchange-traded commodity, as opposed to a "stable" asset or collection of assets.

Stablecoins can be classified into cryptocurrency-based stablecoins, fiat-based stablecoins, and non-asset-backed stablecoins based on algorithmic control, depending on the underlying assets attached to them.

Stablecoins are popular in the cryptocurrency industry because they are not as volatile as other crypto assets like Bitcoin. The prices of stablecoins are typically pegged one-to-one to stable assets such as the U.S. dollar or gold, which are collateralized as reserves.

In this way, stablecoins are widely used in the growing Ethereum DeFi space. Therefore, as a major player in the DeFi field, stablecoins are worth understanding.

Limit Break has completed two rounds of financing totaling US$200 million, led by Paradigm and others: According to news on August 29, Limit Break, the parent company of the NFT project DigiDaigaku, has raised US$200 million through two rounds of financing led by Josh Buckley, Paradigm and Standard Crypto. FTX, Coinbase, Positive Sum, Shervinator and Anthos Capital participated in the investment.

The new funds will be used to develop Web 3 MMO games. The founder of Limit Break launched a new model "Free to Own" (F2O), that is, "free to own", which is created based on the free casting of Genesis NFT. These genesis NFTs produce other NFT series through airdrops and more methods, none of which involve fundraising. [2022/8/29 12:55:55]

Asset management giant VanEck: If Bitcoin becomes a global reserve asset, the price may be as high as $4.8 million: Jinse Finance reported that asset management giant VanEck said that if Bitcoin becomes a global reserve asset, the price of each coin may be as high as $4.8 million. Eric Fine, head of emerging markets debt at VanEck, and chief economist Natalia Gurushina said in a report on March 30 that the implied price of bitcoin is between $1.3 million and $4.8 million. Among them, the lower price is predicted based on Bitcoin as M0, and the highest price is predicted based on Bitcoin as M2. In the evaluation of the gold price, Eric Fine and Natalia Gurushina believe that if it is used as M0, the price of gold should be 31,000 US dollars, and as M2, the price of gold should be as high as 105,000 US dollars. Notably, Russia is considering accepting bitcoin as payment for its oil and gas exports as the West ramps up sanctions. [2022/4/1 14:30:58]

CoinGecko — Top 5 Stablecoins by Market Cap

Former Governor of the Bank of Japan: The rise of digital currency itself cannot fundamentally change the shape of the international monetary system: Jinse Finance reported that at the third Bund Financial Summit, the former Governor of the Bank of Japan Masaaki Shirakawa said that many large-scale payment currencies have already Digitized in form, only cash has not yet been digitized. Considering the proportion of micropayments relative to large payments, the rise of digital currency itself cannot fundamentally change the shape of the international monetary system. Fangming Shirakawa also said that within 10 to 20 years, it is unlikely that such a revolutionary scenario of the global micropayment market will be realized. The characteristics of micropayment behavior determine that it is difficult to realize a real global micropayment market. In each country, the large-amount payment system has formed a unique ecosystem. There are pros and cons to this ecosystem. Without the global monetary system, it is unlikely that a digital global currency will fundamentally change the global micropayment system. [2021/10/23 20:50:56]

Tether is a stablecoin pegged to the U.S. dollar and the first stablecoin created. It is the most popular type of stablecoin in the dapp ecosystem, and it is also the stablecoin with the largest circulation and market value.

USDT is backed by a one-to-one mortgage ratio. Tether Limited claims that every USDT in circulation is backed 100% by actual fiat currency reserves in its reserves. Tether also publishes its balance on its Transparency Update report. the

USDC is a major breakthrough in the way we use money. USDC is like any other digital content-ethexc - they operate as fast as the speed of the internet, transact like the internet shares content, and are cheaper and more secure than existing payment systems.

USDC is issued by regulated financial institutions and backed by sufficient reserve assets, which can be converted into US dollars at a ratio of 1:1. USDC is managed by Centre, a membership-based consortium that sets technical, policy and financial standards for stablecoins.

MakerDAO is the protocol behind the stablecoin DAI , and it’s arguably the leader of the current DeFi wave. DAI is a cryptocurrency pegged to the U.S. dollar at a 1:1 exchange rate. Simply put, we can think of 1 DAI as $1, and each DAI is backed by Ethereum (not a third party). Ethereum's volatile price means it faces some challenges as it tries to maintain the peg.

So, in essence, MakerDAO is like a credit facility that issues loans at a certain interest rate. If the interest rate (stability fee) is low, people are encouraged to borrow more (lock up more ETH). Conversely, if interest rates are high, the cost of capital will be correspondingly high, which of course makes borrowing less attractive.

PAX is a 1:1 USD-pegged stablecoin that has been listed on more than 90 exchanges. Paxos' stablecoin PAX is issued by Paxos Trust Company, approved and regulated by the New York State Department of Financial Services, and the reserves are fully collateralized at a ratio of 1:1.

As a digital asset, the stablecoin PAX can be traded instantly anywhere in the world. It is built on the Ethereum blockchain and has the advantages of crypto assets such as immutability and distributed ledger.

Because PAX is collateralized against USD at a 1:1 rate, it provides a liquid, digital alternative to cash with instant transaction settlement 24/7 and is fully redeemable. the

TUSD is an ERC-20 standard stablecoin backed by the U.S. dollar. It is fully collateralized by reserves, protected by law and verified by third-party certification for security. It also uses multiple escrow accounts to reduce counterparty risk and is guaranteed by law. Token holder assets are not misappropriated. TUSD is the first asset token built on the TrustToken platform.

True USD works with licensed trust companies and banks to guarantee the security of the funds backing the TUSD token. In order to improve this security, the trust company can directly handle all funds, and the True USD team has no access and does not participate in the transfer of managed funds.


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An overview of the top five stablecoins in Ethereum DeFi

A stablecoin is a cryptocurrency created to reduce the volatility of the price of a token, which can be pegged to a currency or exchange-traded commodity.

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