What is Stable coins?
Stablecoin is cryptocurrencies with total amount pegged to other assets. (In the most cases it’s USD or other cryptocurrency). Some examples: Tether, Gemini Dollar, USDC, PAX and DAI.
Stablecoin work as a bridge between the world of crypto and the world of fiat currencies. The companies use some centralized authorities that back every coin with one-to-one equivalent in USD or Crypto and controls the price volatility.
For example Tether, one of the top cryptocurrencies nowadays. The project is made on the Omni Protocol Layer above the , ERC20 (Smart Contract Ethereum)
Tether founders claim that every Tether coin (USDT) is backed with 1 US Dollar equivalent, but for all the years still didn’t provide any official documentation or audits.
TrueUSD (TUSD). Another stablecoin that published a proof that every TUSD token is backed with $1.
TUSD is based only on the Ethereum blockchain, provides a legal protection to the TUSD holders and is opened to third-parties audits.
USDC is an Ethereum based stablecoin created by Coinbase and Circle company.
DAI is an Ethereum based Stable Coin. It differes from other stablecoins by implementing a fully decentralized technology. It’s price is stable price is backed by Ether, not USD.