Deepika- Stablecoins provide the qualities of cryptocurrency as well as the stability of the dollar.
- They are very made to protect investors from market volatility.
Today stable coins are preferred by millions of users throughout the world because they blend the benefits of both cryptocurrencies as well as fiat currencies as they are pegged to some assets they are always stable. They provide crypto users an escape from the high volatility of cryptocurrencies. They are sometimes linked to fiat currency while sometimes to other assets.
This makes them a very good investment option. Many users prefer them because of the advantages they offer. But today there are not hundreds but thousands of stablecoins present in the market. This makes it difficult for investors to choose the best one. Hence, this article provides a list of top stablecoins that one can trust.
Top stablecoins
- Tether
The first stablecoin that occurs in our list is the most famous of all stablecoins Tether. This stablecoin is also known as USDT. This is because it is fully backed by the US dollar, which makes it stable. It was launched in 2014 and from its launch till today it has maintained high stability till now. Even the famous collapses like terra luna collapse and Celsius collapse staked the whole crypto community and it is also called that crypto winter started because of these collapses. Tether showed very little volatility which shows that it can be trusted even at hard times.
The mechanism of issuing tether is also simple. Users just need to deposit one dollar to get one tether. This means that one Tether is issued every time a user deposits one dollar. The mechanism is that simple and the same as that one tether is burnt every time a user claims back their one dollar.
- USD Coin (USDC)
USDC popularly known as USD Coin is the second largest stablecoin after Tether as per the market cap. Not only this, it is currently the sixth biggest crypto with a market cap of $25,977,187,846. Just like Tether, this coin is also pegged to the US dollar. This coin works with the mantra of “digital coin for the digital age”.
There are several use cases for this stablecoin; the best one is providing a haven for crypto traders in times of volatility. It is often seen that the crypto market experiences high volatility. For example, a few years ago bitcoins had no value and now it is worth thousands of dollars. This volatility can be harmful to some investors in that case this stablecoin is the best choice for all.
- DAI
This is the third biggest stablecoin in the market. This coin is famous for its unique way of maintaining its value close to $1. This coin is not pegged to the US Dollar and hence it uses a very different mechanism to peg itself. This stablecoin is based on Ethereum and is managed by the Maker DAO. The price of the coin is soft pegged to the US dollar and by a mix of various other cryptocurrencies. This means that users can use any cryptocurrency to collateralize the stablecoin. When Dai was earlier issued it was not called Dai it was called Sai because at that time it was not multi-collateral but was single collateral.
