Top 5 stablecoins. All you need to know

Despite the overwhelming negative attitude of investors towards cryptocurrencies during most of 2018, the industry continues to experience rapid technological development, which should improve some aspects of this relatively new sector.

Over the past 18 months, various projects have performed the difficult task of limiting volatility by releasing the so-called stablecoins.

Unlike traditional cryptographic tokens, stablecoins are designed to maintain a stable value in relation to an asset or currency at any time. Many stablecoins use the US dollar as a guideline for value.

Most of the stablecoin on the market today is tied to currencies such as the US dollar or euro, with some exceptions noted below.

Although many stable coins are available on the market today, we have narrowed our list to five, taking into account popularity, size and uniqueness.

Tether (USDT)

USDT is the king of stablecoins, outshining all of its competitors in volume, market capacity and accessibility. In fact, the USDT token is so widespread that its daily trading volume currently exceeds all cryptocurrencies except bitcoin.

This coin is issued by Tether Limited and is pegged to the dollar. Each token is equivalent to one dollar, and must be secured with real dollars in the company's account.

The owners of this crypto are the owners of the Bitfinex exchange, and therefore a lot of negative is pouring in their direction. Since by printing new dollars you can move the price of bitcoin, which is attributed to Tether at the time of the growth of bitcoin to $ 20,000.

The token was created to simplify the work of exchanges with fiat money. In fact, when someone says what to enter the dollar on the stock exchange, in fact, it is fixed in USDT. Not so long ago, this token could disappear, as the owners could not pass the verification, and confirm the availability of real money in the accounts.

Tether is based on the Omni Layer protocol, which provides the release of tokens based on bitcoin. It works according to the Proof of Solvency method (proof of solvency) - proof of reservation, or Proof of Reserves.

In general, this coin allows you to quickly take profits, but all graters with the law do not very well affect its reputation.

According to CoinCodex, in June 2018, Tether released the Transparency Update report, which denied claims that it did not have enough reserves in US dollars to support each circulating USDT token.

DAI (DAI)

DAI is a stable coin released by the MakerDAO project. What sets DAI apart from the rest of the list is its unique approach to ensuring a stable price. Unlike most other projects that are provided with foreign exchange reserves held in separate or several bank accounts. DAI depends on a smart contract system with Collaterized Debt Position (CDP) supported by ETH to keep its price in balance.

Everyone can take part in joining Ethereum to the system, which will further strengthen the stability of the coins. The DAI token works in tandem with the Maker MKR token, which is much appreciated.

By the way, one guy from Switzerland even founded a legal company with this stable coin:

TrueUSD (TUSD)

As is the case with Tether, TrueUSD is pegged to the US dollar held in the company's reserves at a ratio of 1: 1. The two coins mostly diverge in different positions of the issuing companies with regard to transparency.

TrueUSD team seeks to provide greater clarity in the internal work of their business operations, and fully disclose the factual information about their reserves in US dollars, located in various banking institutions around the world. TrueUSD is subject to monthly reports by third parties and regularly publishes its account information.

USD Coin (USDC)

USD Coin is another project aimed at strengthening its position in the market of stable coins. It was released by the CENTER and Circle consortium, a fintech startup that acquired the Poloniex exchange in early 2018.

USDC is a standard ERC20 token aimed at constantly maintaining a 1: 1 peg to the US dollar, and is guaranteed to be fully supported by monthly reports conducted by certified third parties.

Gemini Dollar (GUSD)

Gemini Dollar was launched by one of the largest cryptocurrency exchanges in the world, Gemini.

Like most stable coin projects, GUSD is a token with dollar support, but it has a clear advantage over its competitors in that it is supported by the famous brand Gemini. With the full support of its infrastructure, Gemini Dollar is ready to gain momentum and snatch a significant part of the stable coin market in the future.

In addition, Gemini has maintained an end-to-end insurance product to provide FDIC insurance within certain limits, with periodic reports published by BPM Accounting and Consulting.