Sumit BeraMon, Mar 30, 2020 11:00 AM
How 2020 Affects Stablecoins: Top Stablecoins
Stable digital forms of money that are not dependent upon the most grounded unpredictability and are simultaneously decentralized and well known as a method for installment — this is the fantasy of the makers of cryptos. The purported stablecoins assist them with getting it.
What is a Stablecoins?
Stableсoin is a type of cryptocurrency that is based on some classic valuable assets such as US dollar, gold or oil.
In 2012, J. R. Willet published a paper named "The Second Bitcoin Whitepaper", where he described a way to create new tokens based on the bitcoin blockchain.
The protocol is called Mastercoin. The author states, that it should allow end users to create their own cryptocurrency with a fixed rate due to binding to another valuable unit. Just a year later Willet started the first token sale and raised $500 thousand to start their project. In November 2014, the Realcoin cryptocurrency, now called Tether, was launched based on this Protocol. It became the first-ever stablecoin.
In order to understand what stablecoins are, let’s have a look at the most popular ones.
TETHER (USDT) OR "DIGITAL DOLLAR”
Tether is a coin based on Bitcoin blockchain and linked with the value of the US dollar. The USDT is issued only when the bank account of the Tether Limited is replenished so that one USD is equal to one USDT token. When USD is withdrawn from companies’ account, issued tokens immediately redeem.
DIGIX (DGX) OR "DIGITAL GOLD”
DGX is a crypto based on Ethereum blockchain, tied to gold. 1 DGX is now equal to 1 gram of gold. It works much more complicated than Tether: the use of smart contracts made it possible to ensure that each Digix token corresponds to a specific real numbered gold bar with the corresponding documents.
EL PETRO OR THE "DIGITAL OIL”
El Petro is a crypto of Venezuela, based on NEM blockchain. It is tied to oil, and 100 million El Petro is equal to 5,3 billion barrels. It is noticeable that almost all oil companies are required to use El Petro in their calculations, while Venezuelans can use it to cover governmental bills.
Perspectives of Stablecoins
2020 is expected to be promising for stablecoins, as some new players enter the market with impressive numbers. Let’s just briefly look through them.
USDK (USDK). This coin has a $29 million capitalization and is being traded since August 2019. USDK is tied to USD and issued by OKLink. Identification is required.
CryptoFranc (XCHF). Capitalization is $11 million. Traded since October 2019. The exchange rate is linked to the Swiss franc and is reserved in real francs. Reserves are regularly audited. Developed by the Swiss company Swiss Crypto Tokens AG. Identification is required.
USDQ (USDQ). Capitalization is $5.6 million. Traded since July 2019. The exchange rate is linked to the US dollar and is reserved in Bitcoin. It was developed by the Platinum consulting company but operates in a decentralized way through Q DAO with a QDAO token (capitalization of $1.7 million) and it’s own mining community that manages the project.
All in all
It is difficult to say in which direction the stablecoins will develop and whether they can become quite common. However, the fact that more and more stablecoins appear tells us that they are not going to stop evolving yet.