I want to talk about the most interesting and main top stablecoins that you should pay attention to. I already wrote an article on this topic, but the data is outdated and the list has been updated.
Stablecoins are cryptocurrencies with a fixed or stable exchange rate. They are a universal unit of calculation, convenient for trading, storing capital and protecting an investment portfolio from the volatility of cryptocurrencies. Stable coins can have various sources, assets as collateral and mechanisms for maintaining value. In the crypto industry, stablecoins tied to the price of the dollar are the most common.
You can use useful of them for both storage and multiplication in investment projects. In addition, stablecoins are a means of protection against volatility in a cryptocurrency portfolio. There are hundreds of stablecoins on the cryptocurrency market. Here is a list of top stablecoins:
USDT token is the most popular centralized stablecoin. It survived a bunch of scandals, courts, depegs and crypto winters. The project was officially launched in 2014 by Tether Limited. In the same year, the company announced a partnership with the well-known cryptocurrency exchange Bitfinex.
Cryptocurrency has come a long way of development until it took on a modern look. According to CoinmarketCap, as of November 20, 2023, it ranks 3rd in the world, second only to BTC and ETH. The capitalization is 87.7 billion dollars. The coin can be used as an investment asset and as a reliable means of settlement between participants in the decentralized financial market.
USDT is the most popular coin for investment in platforms. I advise you to choose it when choosing for several factors. Namely: low limits on deposits and withdrawals, low commissions, stability of the coin, support all wallets and exchanges.
I always use this currency for platform investments.
The Tether company, which manages USDT, publishes the results of such reports on its website. According to an audit conducted in August 2022, Tether’s reserves consist of US Treasury bills, cash, commercial paper and currency market funds.
The second most popular centralized coin is the USDC stablecoin. It seized dominance in L2 networks at the beginning of the year and experienced strong depegging (decoupling from the dollar).
USD Coin is a relatively young project. The company «Centre» created USDC in September 2018. This project is supported by the founders of the most popular exchange in the US, Coinbase. This was the reason for attracting attention to the token and its rapid implementation on popular crypto exchanges.
In 2023, you will be able to find it on all major exchangers. The number of currency pairs in which developers allow you to exchange tokens is constantly increasing. USD Coin can only be bought and transferred in the ERC-20 standard. For this reason, you will be able to store it in wallets that support the Ethereum network.
the most popular decentralized stablecoin backed by RWA (U.S. securities) and ETH (including stETH). It relies too much on centralized assets, which is why it causes concern among some. The creators of the project developed it as an alternative to the already existing stablecoins. The main problem of many projects is the lack of trust. Users create DAI cryptocurrency as opposed to centralized stablecoins.
At the end of December 2017, Maker released a system for a decentralized stablecoin called “Dai”. For him, there is no central authority like Tether to back up the value, and no traditional bank backing every Dai with a real US dollar. There is nothing to shut down and there is no centralized system to trust. Dai is used exclusively on the Ethereum blockchain using smart contracts.
Project administrators select this coin for the type of payment in investment projects. You can only choose it if there is no other choice. This coin supports the ERC-20 network. Therefore, it has its drawbacks. Cons of using when investing: high limits when opening a deposit, commissions for transfers.
FRAX is a hybrid decentralized stablecoin that is partly backed by reserves (like DAI) and partly algorithmic (like UST). It is actively used in various strategies for passive income in DeFi.
FRAX includes an arbitrage system allowing the stablecoin to be viable and to some extent secured. Apart from the under-collateral, FRAX also uses USDC instead of ETH. As one of the best new algorithmic stablecoins on the market, FRAX is also notable for its governance.
FRAX has a minimally controlled approach that allows the community to change significantly fewer algorithm sets.
LUSD is the most decentralized stablecoin of all. It works completely autonomously without the possibility of human intervention. It is backed by ETH only (like DAI in the early years).
One of the varieties of DeFi products is decentralized protocols for lending. Thanks to them, users can get a loan secured by crypto assets. The top in terms of popularity and loyalty of the conditions for issuing a loan includes Liquity. It has 2 native tokens. One of them is a stablecoin pegged to the dollar.
This is a fork of the LUSD stablecoin that uses stETH (from Lido) as collateral instead of ETH. This allows holders to passively earn money by staking ETH (6-8% APY).
The new crypto project was created on the MobileCoin blockchain, which is known for its optimization for mobile devices and integration with the Signal messenger.
In addition to end-to-end zero-knowledge encryption, the new MobileCoin product is fully KYC and AML compliant. The company says: “We are creating a data security cryptocurrency that also complies with the law.”
The Verified USD Foundation announced the launch of Verified USD (USDV). It is a community-governed stablecoin. It is also fully supported by the unrivaled on-chain transparency and stability of a basket of tokenized US Treasury bills (T-bills). A native ERC-20 compliant stablecoin, each USDV is pegged to an equivalent value of 1 USD.
USDV is a stablecoin released in collaboration with LayerZero. It gives passive income to holders of bonds like DAI and FRAX.
You can track All USDV transactions on Etherscan. Its open-source smart contracts have undergone rigorous security reviews by third parties such as OtterSec, Zellic.io and Paladin.
I can divide all these stablecoins into 2 large groups: reliable and profitable.
Only 3 stablecoins can be considered reliable: USDT, USDC and DAI. They have been on the market for a long time and have stood the test of time. Great for storing funds.
And everything else is stablecoins for active users of DeFi protocols. Among them, I would highlight FRAX and peUSD – they are most suited for farming, pools and other activities on which you can earn more than 10% APY. But there is nothing stopping you from earning even USDT through deposits on various platforms such as Stargate.
All in all a stablecoin is a cryptocurrency that has a fixed value due to its pegging to the price of the dollar. You can always store currency in stablecoins and invest for the purpose of multiplying. Each investor can use the first two or three coins from my list for stable work in the world of cryptocurrencies. You can also always see the current coins on Coinmarketcap.
So far, I wrote about the most interesting stablecoins on the market to keep in mind if you are diversifying your portfolio or studying the market.
I also advise you to choose the USDT stablecoin for investing in projects. It has significant advantages over other stablecoins. I always use this currency for platform investments.
Disclaimer: This information is not investment advice. Assess the risks yourself before making any investment decisions.
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