Stablecoins: Stability in a volatile crypto market
Stablecoins (stable-price cryptocurrency) have emerged out of the need for stability within the crypto market, offering an alternative to cryptocurrencies with high volatility. Stablecoins can be pegged to a currency such as the US dollar, the price of a commodity such as gold, or they can use an algorithm to control the reserve.
Playing the role of providing stability for transactions and investments in the crypto space, stablecoins are primarily used by traders who seek to avoid the volatility associated with other cryptocurrencies but still wish to hold digital assets.
Large institutional investors can use stablecoins to facilitate large transactions or international transactions and to maintain liquidity in their portfolio. Stablecoins offer a perfect alternative to FIAT currencies due to reduced costs and rapid transaction times, as well as the security features of the blockchain that ensure a high level of protection during transactions.
Due to their stable value, stablecoins dominate daily trading volumes in the crypto market. Their widespread adoption across various blockchain networks continues to contribute to their liquidity and accessibility.
The most important stable cryptocurrencies in the crypto space are those that have a constant 1:1 relationship with the US dollar, as well as cryptocurrencies that are linked to valuable commodities such as gold.
On Tradesilvania you can invest in the most well-known stablecoins: USDT, USDC, EURC, DAI, PAXG and PYUSD.
- USDT (USD Tether)
Tether (USDT) is among the first and most well-known stablecoins in the crypto world. The stablecoin aims to maintain a peg to the US dollar and is backed 100% by Tether reserves. It was initially launched as Realcoin and operated on the Bitcoin blockchain using the Omni protocol. It later expanded to other networks and on Tradesilvania is available on Ethereum, BNB Smart Chain, Tron, Polygon, MultiversX and Solana.
- USDC (USD Coin)
USDC is a regulated stablecoin by financial institutions and is fully backed by assets in US dollars. USDC is a tokenized US dollar, with the value of one USDC pegged as close to the value of one USD as it can get. On Tradesilvania is available on various blockchain networks including Ethereum, Polygon, Solana, MultiversX, and Arbitrum One.
- EURC
Designed for stability, EURC is compliant with MiCA and backed 100% by euro. Euro reserves are transparently held at regulated financial institutions in the EEA with published monthly attestations. On Tradesilvania it is available on Ethereum and Solana networks.
- DAI
DAI is an Ethereum-based stablecoin whose issuance and development are managed by the Maker Protocol and MakerDAO. To maintain a stable price of 1:1 relative to the US dollar, the Maker Protocol is encoded to ensure that each existing DAI is guaranteed with a corresponding amount of other cryptocurrencies.
- PAXG (PAX Gold)
Pax Gold (PAXG) is an asset-backed token where one token represents one fine troy ounce of a London Good Delivery gold bar, stored in professional vault facilities, thus offering a unique form of stability. If you own PAXG, you own the underlying physical gold, held in custody by Paxos Trust Company. It is available on the Ethereum network.
- PYUSD (PayPal USD)
Designed for digital payments and the Web3 space, PYUSD is a stablecoin launched by the global payment services provider PayPal. The PYUSD stablecoin is built on the Ethereum network and designed to maintain a constant value of 1:1 with the US dollar. It is backed by dollar deposits, US treasuries, and cash equivalents. On PayPal, you will be able to buy and sell 1 PYUSD for 1 USD.
In conclusion, stablecoins have become fundamental for the efficient functioning of the crypto market, offering stability and liquidity in an environment characterized by high volatility. For individual investors, companies, and institutional investors, they represent an essential tool for risk management and facilitating transactions within the crypto ecosystem.
Start exploring the benefits offered by stablecoins in the crypto world now! Tradesilvania is the perfect platform to start investing in the most well-known digital cryptocurrencies.