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Cryptocurrency sector has attracted almost all the folks from around the globe, no matter if it is stablecoins, metaverse coins, DeFi or anything, they were lured to space. Some saw the sector as the pot at the end of a rainbow, for some it was a pipe dream to become successful, whatever the reason was, no one can deny that the sector caught a myriad of eyes.
There are over 18,000 crypto assets in the space including stablecoins, DeFi coins, metaverse coins etc. We are here to discuss the stablecoins.
For starters, stablecoin is a cryptocurrency where its value is designed to be tied to fiat money, a crypto asset, or to exchange traded commodities like industrial metals or rare/precious metals.
There are several stablecoins in the crypto sphere, but we are here to see which of them are the best and who stands tall among them.
PAX Dollar (USDP)
PAX Dollar is a Fiat-collateralized stablecoin. It allows transacting with blockchain assets via lowest possible price risk. It is issued and redeemed by Paxos as ERC-20 token on the blockchain of Ethereum.
Pax Dollar (USDP) is purposely modeled with simplicity in mind. 1 USDP is issued in exchange for $1. Similarly, from a vantage point of redemption, 1 USDP can be redeemed for $1.
Due to this ease, entire system can be scripted as a fundamental smart contract, so that it functions as per the programmed accords.
Binance USD (BUSD)
BUSD is issued by Binance and is supported 1:1 by USD in collaboration with Paxos, commanded by NYDFS. BUSD can be utilized wherever ERC-20 tokens are accepted for payments, commerce, loans etc.
BUSD is entirely backed by reserves held in fiat cash in devoted omnibus accounts at insured United States banks and/or US Treasury Bills.
Top-notch auditing organization will attest the BUSD’s matching supply and underpinning USD on a monthly basis.
TerraUSD (UST)
TerraUSD (UST) is Terra blockchain’s algorithmic and decentralized stablecoin. It is a yield-bearing, scalable coin which is tied to USD. It was made to deliver value to Terra community and provide scalable solution for DeFi amid critical scalability issues faced by other stablecoins such as DAI.
TerraUSD is designed to complement both persisting cryptocurrencies and fiat as a store value and a way to transact. The protocol adjusts Terra supply to respond to the shift in demand to keep the price steady.
This is attained utilizing LUNA, whose stable rewards are modeled to absorb volatility from fluctuating economic cycles. Terra also attains efficient adoption by returning seigniorage uninvested in stability back to the users.
DAI (DAI)
DAI is a stablecoin based on Ethereum blockchain, whose development and issuance is handled by MakerDAO decentralized autonomous organization and the Maker Protocol.
DAI value is soft pegged to USD and is collateralized by a blend of other digital assets deposited into smart contract vaults every time a latest DAI is minted.
DAI is produced by depositing cryptocurrencies into Maker vaults on Maker protocol. Folks are allowed to access Maker Protocol and make Vaults via Oasis Borrow or other community built interfaces.
USD Coin (USDC)
USD Coin aka USDC, is a stablecoin whose value is tied to US Dollar on a 1:1 ratio. Each unit of this stablecoin in circulation is supported by $1 that is held in reserve, in a blend of cash and short term US Treasury bonds.
Back in 2020, Coinbase and Circle together declared a prime upgrade to USDC protocol as well as smart contract. Objective of this upgrade is to make it simple for USD Coin to be utilized for routine transactions.
Tether (USDT)
Ending this list with the most prominent stablecoin. Tether (USDT) is a stablecoin which mirrors the value of US Dollar, issued by Tether, an organization based in Hong Kong. It’s peg to USD is attained through maintaining a sum of commercial paper, cash, reserve repo notes, and treasury bills in reserves which is equal in United States Dollars to total USDT in circulation.
Tether (USDT) possesses a distinct attribute. The value is guaranteed by Tether to stay pegged to USD. As per the company, whenever latest Tether tokens are issued, it allocates a similar amount of USD to its reserves, thus making sure that it is entirely backed by cash as well as cash equivalents.
So Who’s Got The Lion’s Share Here?
Without doubt, Tether holds the crown with respect to the stablecoin space. Most considerable thing to keep in mind while comparing other stablecoins is that Tether offers a guarantee to stay pegged to US Dollar, which isn’t offered by any of the coins on this list.
So it is safe to say that Tether alone is sitting on the throne, with no competition in sight at present.
Anurag is working as a fundamental writer for The Coin Republic since 2021. He likes to exercise his curious muscles and research deep into a topic. Though he covers various aspects of the crypto industry, he is quite passionate about the Web3, NFTs, Gaming, and Metaverse, and envisions them as the future of the (digital) economy. A reader & writer at heart, he calls himself an “average guitar player” and a fun footballer.
