The Rise of Stable Coins and Their Importance

about 2 years ago

Stablecoins are rapidly growing in the cryptocurrency world, particularly in 2022. According to the most recent update and calculation, there are over 200 stable coins that are pegged to the USD, gold, and other assets. There are also many underdeveloped stable coins, particularly algorithmic stable coins that are not backed by any asset, such as US dollars or gold. These stable coins are both decentralised and centralised, with different roles and functions. Some of them are applicable and necessary for DeFi applications.

STABLE COINS ARE SUPPOSED TO REMAIN AT $1

Stable coins are supposed to remain at $1 and not move in response to a bull or bear market. If this occurs, the coin is no longer considered stable, but rather risky. As we recently saw with the LUNA case, its stable coin crashed badly, causing many investors to lose their entire investment and forcing some to commit suicide. People believed that stable coins would remain at $1, but the sudden crash of LUNA caused disruption and eroded their trust. As a result of the Terra case, investors are now thinking twice about investing or putting their money into stable coins.

The cause of the LUNA crash is still unknown, and many people are looking for their money to see if they can recover in any way. However, it has come to light that Du Quoin, who is 30 years old, is known in some Twitter circles for being conceited, so some people believe this was a personal attack. Cardano founder Charles Hoskinson tweeted a theory but later deleted it. They agreed to borrow 100,000 BTC from the institution, but the same institution sold the BTC and UST, causing the market to panic, resulting in the destruction of the UST, which had already crashed by more than 99%.

WILL MORE STABLECOINS SUFFER FOR THE CRYPTOWORLD?

As we can see, there are over 200 stable coins, each of which is tied to an external reference. Following the Luna crash, all stable coins were left wondering whether they should repeat history. People are perplexed about which stable coin is better to invest in. Which one is more secure and is truly tied to any external reference? More stable coins, I believe, will cause investor confusion about which stable coin to choose. If we only have a limited number of stable coins for market stability, the market will be more secure, and people will be more drawn to stable coins.

WHY ARE STABLE COINS SO IMPORTANT?

The crypto world desperately needs stable coins to help investors transition from volatile to stable coins. As we all know, Bitcoin is the most popular cryptocurrency, and it has risen from $5,000 to $60,000. Along with this volatility, investors consider shifting their funds to safer coins, which aid in trading. Many DeFi projects require stable coins in order to build their technology and set up their projects. As a result, stable coins serve as a medium of exchange, from which merchants profit the most. Many people consider passive income to be risk-free, so they invest in stable coins.

The top five stable coins that investors should trust are the USDT, BUSD, USDC, TUSD, and DAI, which are among the best stable coins. I also recommend investing in these stable coins, which offer the best APR. These stablecoins can be found in all of the most popular exchanges. However, I use USDT and BUSD, which have strong back support from US dollars and the Binance exchange. They both offer the best APR by saving and the APR is 8% annually, which is very good.

This is an attempt to assist you in spreading knowledge and awareness about stable coins. These are my opinions and reviews about which I have information and have shared with you. I hope you find this post to be informative and helpful. If you find the post useful, please reblog it so that it reaches as many people as possible and that they can benefit the most. Don't forget to upvote, which will help me financially and grow my account. Please feel free to ask any questions you have about the topic, and I will do my best to answer them.