What is a cryptocurrency named Stablecoin and how they works.
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CryptoDony
The common crypto-derivatives such as bitcoin, litecoin, ethereum and others have a great volatility in their prices, to avoid those variations that can be very abrupt and to facilitate the exchanges with stable prices were created stablecoins.
A fixed price or that can vary minimally is the use behind the stablecoins.
There are stablecoins backed by a currency like US dollar or another currency such as USDT, TrueUSD (TUSD), Paxos Standard (PAX), Center, Gemini Dollar (GUSD), Bitcoin Air (USDAP) and other country-based currencies , based on stored values or commodities like Digix Gold Tokens and others to facilitate exchanges in a crypto exchange.
These stablecoins have certain level of centralization.
Decentralized solutions of stablecoins are based and collateralized in other crypto-currencies as collateral.
Some stablecoins that work this way: Havven (nUSD – stablecoin and HAV – the nUSD supported by guarantee), DAI (pair: CDP and MKR) and some others.
Stablecoins allow trades to be made without the use of foreign fiat currencies, for example a non-US citizen may use usd’s value to trade with other currencies having a stable value as a basis.