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Stablecoins: What are they, how do they work, how much is there?

Stablecoins: What are they, how do they work, how much is there?

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Las stable tires they are cryptocurrencies whose values ​​are tied to assets like US dollars, precious metals like gold, real estate, and even other cryptocurrencies to retain value.

They were created in response to the known volatility of crypto markets, providing price stability through reserve assets. Cryptocurrency must continue to function both as a commercial and as a means of storing wealth and maintaining its purchasing power over time. stable tires how Coin USD (CRYPTO: USDC) succeeds when cryptocurrencies like unstable Bitcoin (CRYPTO: BTC) y Ethereum (CRYPTO: ETH) no.

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These dollar-indexed coins, unlike Bitcoin and Ethereum, are not intended for trading or investment. Instead, they are designed to make you trade in lots exchanges more fluid cryptography. Instead of buying Bitcoin with fiat currency, a user can a stable tires with fiat currency and then exchange it for another cryptocurrency.

The advantages are mobility, accessibility and security because these currencies are not tied to institutions or centralized systems due to their decentralized structure.

Las stable tires can be associated with exchange specific cryptocurrency such as USD Coin with Coinbase Global Inc (NASDAQ: COIN) y Heated (CRYPTO: USDT) with Bitfinex.

There are three types stable tires: fiat collateral, cryptographically collateral, and unsecured (algorithm); Below is a brief description of each. (Definitions provided by the corporate financial institution).

Stables with a fiduciary guarantee
Las stable tires fiat-backed securities are backed by a sovereign currency like the US dollar. It means that its emission is a certain amount of signs of a given cryptocurrency, the issuer must offer dollar reserves of the same amount as collateral.

Raw materials like gold can also be used here. The reserves are often maintained by custodians who operate independently and are regularly audited for compliance. Crypto-currencies backed by dollar deposits include Tether and USD Coin.

Some stable tires The recognized trusts are:

  • Coin USD
  • TrustToken
  • Heated (CRYPTO: USDT)
  • Gemini Dollars (CRYPTO: GUSD)

Stablecoins with cryptographic guarantee
The value of stable tires Encryption-collateral is tied to other cryptocurrencies. Since cryptocurrency is also the underlying asset in this case, it is not traditionally secure and can also be very volatile.

The term used to refer to this type of stable tires It is “over-guaranteed”. It means that even a small amount of cryptocurrency may need to issue a backup cryptocurrency signs.

Here are some of the stable bases with crypto support:

  • ManufacturerDAO (CRYPTO: MKR)
  • Synttext (CRYPTO: SNX)
  • Reserve (CRYPTO: RSV)

Stables without guarantees (algorithm)
Las stable tires No warranty implies that any reserve assets will be used. Instead, its stability stems from a working mechanism, such as a central bank.

For example, the base currency of the cryptocurrency uses a consensus mechanism to determine whether to increase or decrease the supply of signs as required.

Some stable tires Recognized algorithms are:

  • Terra (CRYPTO: LUNA):Find out more about Terra here.
  • Frax (CRYPTO: FRAX)

According to CoinMarketCapthere are 98 stable tires. Here are the top 10, ranked by market cap:

  1. Heated$ 83,172,427,823
  2. Coin USD$ 48,414,660,313
  3. Binance USD (CRYPTO: BUSD): $ 17,246,290,409
  4. Terra$ 16,240,652,738
  5. Dai (CRYPTO: DAI): $ 7,388,215,695
  6. TrueUSD (CRYPTO: TUSD): $ 1,295,840,635
  7. Dollar Pax (CRYPTO: USDP): $ 947,339,037
  8. Neutron USD (CRYPTO: USDN): $ 900,077,210
  9. Fei USD$ 419,300,349
  10. USD (CRYPTO: USDD): $ 256,691,157

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