Stablecoins backed by cryptocurrencies are issued with cryptocurrencies as collateral, similar to fiat-backed stablecoins. However, while fiat collateralization is normally done off the blockchain, the cryptocurrency or crypto asset used to back this sort of stablecoin is done on the blockchain utilizing smart contracts in a more decentralized manner.
Stablecoins such as USDT and USDC have become indispensable in the crypto world. We use them to store non-volatile value, allowing us to keep our purchasing power constant from day today.
Unfortunately, the US Dollar does not operate in this manner. The Federal Reserve is in charge of the printing of US dollars, and its fiscal policies have regularly resulted in the currency’s depreciation. This means that a dollar is worth more today than it will be tomorrow.
Stablecoins were created to allow day traders or investors who make money by doing crypto trading everyday. It also allows them to store the value of their deposited funds or wealth on unlicensed and unregulated exchanges that do not allow their customers to their bank to the platform
Some of the world’s most prominent cryptocurrency exc ...