![]() ![]() ![]() However, with the three classes of stablecoins explained in-depth, readers should be able to apply this framework to other tokens they encounter to understand better the pros, cons, and risks associated with them. Smaller stablecoins, including many that exist predominantly outside the Ethereum ecosystem, have not been included for brevity. While most stablecoins today fall into one of these classes, some tokens listed feature characteristics of more than one group. It will split stablecoins into three distinct classes: reserve-backed, overcollateralized, and algorithmic. ![]() This article is a definitive guide to all major stablecoins in circulation today, as well as a couple of relevant examples which have since collapsed. According to Statista data, the combined valuation for the top 10 crypto stablecoins has jumped from $10.8 billion to over $150 billion since June 2020. The demand for stablecoins in DeFi caused their market capitalization to soar. Known in crypto circles as “DeFi summer,” this period saw the emergence of several decentralized finance protocols that allowed Ethereum users to earn a yield on stablecoins and other cryptocurrencies. Instead of needing to send funds off-chain to trade them back into fiat, investors can seamlessly swap their volatile cryptocurrencies for dollar-pegged assets using decentralized exchanges like Uniswap.Īlthough dollar-pegged assets such as BitUSD and NuBits have a history dating back to 2014, stablecoins didn’t reach mass adoption until the summer of 2020. This is especially relevant to smart contract-enabled blockchains like Ethereum, the network that hosts the most stablecoins in circulation today. Stablecoins have become a crucial part of the crypto ecosystem because they let investors take advantage of the price stability offered by fiat currencies. dollar, but stablecoins representing other currencies, such as the euro, the pound sterling, and the Mexican peso, are also in circulation. The most widely used stablecoins track the price of the U.S. What Are Stablecoins?Ī stablecoin is a blockchain-based token that is designed to stay at an equal value, typically that of a specific fiat currency. The definitive guide to the top stablecoins in use today. ![]()
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