The development of enterprise DeFi use cases is underway, but mainstream adoption may take longer than expected.
One of the hindrances to mainstream cryptocurrency adoption is price volatility, as these assets are freely traded in the open market without central administrators tasked with maintaining price stability. The anticipation of potential losses and gains has hindered cryptocurrency’s use as a medium of exchange. Stablecoins, however, are cryptocurrencies designed to maintain a stable value over time, making them ideal for commercial transactions.
The introduction of stablecoins in the cryptocurrency market ushered in a new wave of liquidity, as exchanges were able to provide trading pairs with tokens representing traditional fiat currencies.
Stablecoin design takes many different forms, each with its own tradeoffs:
- Reserve-backed stablecoins: Cryptocurrencies pegged to the value of a fiat currency held in reserve by a company or consortium. E.g., Tether (USDT), USD Coin (USDC) and Paxos Standard (PAX).
- Collateralized stablecoins: Tokens backed by other cryptocurrencies that retain a one-to-one value with a fiat currency through over-collateralization to absorb potential volatility of the underlying assets. E.g., Dai and BitUSD.
- Algorithmic (seigniorage supply) stablecoins: Rather than using a reserve or collateralization to maintain a stable value, these stablecoins are facilitated through an automated expansion and contraction of the monetary supply, emulating the role of central banks in the fiat economy. E.g., Basis.
Cash, cash equivalents, other short-term deposits and commercial paper make up 75.85% of Tether’s proven reserves as of March 31.14604
Facebook-initiated Diem Association announces a new model of its upcoming stablecoin that is set to be issued by California state-chartered bank Silvergate.15193
“UNI is in an excellent position to be a token for such an oracle,” said Buterin, in reference to decentralized pricing oracles for stablecoins.17441
A close look at the policy issues relating to the potential impact of stablecoins on financial systems and economies around the world.17656
Declaring BTC a store of value — e.g., gold 2.0 — but not a medium of exchange, defies logic. It must first have a use case.26878
Stablecoins, IOU tokens, and future incentive programs are coming down the pipe for jilted investors.49459
Real-world adoption and a growing DeFi ecosystem help lift the price of WAVES to a new all-time high.24391
Tether, USD Coin, Binance USD, and DAI are now worth more than $78 billion combined.22254
A rebranded crypto platform has launched a decentralized stablecoin that’s pegged to the euro, and says this asset will be crucial in encouraging the next wave of adoption.7235
Stablecoins backed by fiat and other assets are increasingly gaining popularity, with many more solutions being brought onto the market each year.30228
A deep dive into the EU’s Markets in Crypto-Assets regulatory proposal, which could provide a precedent for other countries.17563
Crypto debit cards are growing in popularity as holders look for effortless ways to spend their assets.22964
“The group’s consolidated assets exceed its consolidated liabilities,” Moore Cayman wrote of Tether Holdings Limited.6846
A $100 investment into DOGE 100 days ago would now be worth $2,742, while the same investment into BTC would be worth $130 today. Ethereum’s hash rate has increased by 4.5 times BTC’s this year.39102