Stablecoins have emerged as significant players in the crypto market this year, driven by user demand for flexible liquidity in fiat currency times. These currencies are defined as a type of digital currency that can be pegged to underlying real-world assets or backed by them. These assets can be anything from fiat money, commodities like gold or silver, or even another cryptocurrency. As their name suggests, stablecoins are designed to have a value that stays (rather) stable like cash, a contrast to the volatility common in cryptocurrency trading today.
To further illustrate this scenario, a typical fiat-backed stablecoin might involve the token issuer holding 100,000 tokens, each worth $1 USD. Token holders can trade these coins, similar to any other cryptocurrency. The major difference is that the holder can also redeem the coins for an equivalent amount of USD at any time. Since USD is fairly stable, users don’t have to worry that their money will lose its value overnight. As a result, according to CoinMarketCap, there is currently 120 billion dollars worth of stablecoins in circulation.
Managing market instability
Daily transactions
Building DeFi foundations
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