They offer stability and predictability, allowing traders to enter and exit positions without being subjected to price fluctuations and to know they can hold value. Stablecoins that tightly hold their pegs are the most desirable for cryptocurrency trading, payments, and DeFi. It’s important that consumers are able to hold stable value tokens, especially on-chain value and know that it will always be redeemable for that value. Stablecoins are vital building blocks for crypto, the very notion of their absence in a composable decentralized money market would render the markets highly ineffective. Roles of stablecoins - Importance of stablecoin pegs The same goes for LUSD, whilst it’s not backed with USD it is instead carefully controlled fully with ETH reserves and operates at a constant 110% collateral ratio. The hope with the likes of TUSD is that each and every single dollar is backed on a chain and 100% verifiable through the likes of Chainlink.
One of the most notable competitor examples includes TUSD (TrustUSD) and LUSD (Liquity USD). MakerDao backs DAI by using the overcollateralization of USDC and ETH, currently over 50% of the reserves backing the popular stablecoin are based in USDC. DAI, an algorithmic stablecoin issued by the MakerDao has a 1:1 value with the USD, has also run into some depegging trouble like USDC, from its $1 peg down to a low of 0.88. There are other alternative stablecoin competitors which have been popularized with the ‘fully reserved’ model and are still growing today.
0 kommentar(er)
