In the developing crypto money market, coins that are indexed to any fiat currency that does not have price movement volatility are stable coins. The first stablecoin was USDT (Tether), which was released in 2014. When we look at the market volume, we can see that the most used stablecoin is USDT (Tether). Immediately after the second place is USDC (Usd Coin). The price volatility of stablecoins must remain constant, so assets with a fixed value should be used for the price index. Although the stablecoin index is generally based on the US dollar , there are stable coins indexed to other assets such as euros and gold in the crypto money market. Or there are stablecoins indexed to crypto assets like DAI.
In general, although it is the same as the currency in which stablecoins are indexed to price, sometimes small fluctuations may occur. This is due to processing complications in price volatility in the market. For more information on this topic, you can check out our blog post “
What is the Reason for the Fluctuations in Stablecoins?
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Apart from stablecoins indexed to fiat assets, there are also stablecoins that are not indexed to any value. These stablecoins are called uncollateralized stablecoins or algorithmic stablecoins .
These stablecoins are Examples include Frax (FRAX), USN (USN), TerraUSD (UST). Since it is not indexed to any fiat or crypto assets, there is a higher probability of price volatility in these stablecoins. The volatility logic of these stablecoins is similar to other stablecoins, and the difference is that as these stablecoins are used, the coin to which the stablecoin is linked to the equivalent of the stablecoin is burned according to the trading situation.
What are Stablecoins?
The most widely used stablecoins are ICRYPEX; USDT (Tether), BUSD (Binance Usd), USDC (Usd Coin), TRYB (BiLira). In addition to these, some coins that have their own ecosystem have stable coins used in the ecosystem. For example; SUSD (Susd) , cUSD (Celo Dollar), USDX (Kava) , MAI (Mimatic) , agEUR (AGEUR) , PAXGold (PAXG) can be issued.
What are the Advantages of Using Stablecoin?
Since stablecoins do not show volatility in price, they are not suitable for trading purposes. Stablecoins are generally used for trading operations. Let’s take a look at the answer to the question of what advantages trading with stablecoins can offer us different from trading with fiat money;
• You can transfer money 24/7 with stablecoins. Since the transfers will be via blockchains, you don’t need to wait for any bank confirmation or transfer time.
• Transfers are faster and cheaper than banks.
• You can earn income by staking your stablecoins without dealing with a 3rd party organization.
• You can easily use it in RDE with smart contracts.
• When trading crypto, you can quickly convert your earnings to a dollar/TL balance.
• You can easily transfer between DEX platforms.
• You can keep your savings without the need for banks.
