As cryptocurrency markets have become increasingly volatile in 2020, investors are asking themselves the same question: which cryptocurrencies are the safest? In this article, you’ll explore information about some stablecoins that have survived price drops and continue to be used as a store of value. Have a look at such stablecoin below:
TrueUSD is a USD-backed stablecoin that is 100% collateralized and legally protected by custodians. The token is fully collateralized by professional trust companies, which are held in escrow accounts with professional fiduciary partners. TrueUSD’s smart contract system provides legal certainty of redemption at any time for each TUSD coin.
Paxos Standard is a stable cryptocurrency backed by the US dollar. This token will always be worth $1, and you can use it as a medium of exchange or storage of value.
The coin’s price stability comes from its underlying assets, which are held in trust by an independent custodian company called Prime Trust (which also provides custody services for other cryptocurrencies). These assets include cash deposits with U.S.-domiciled banks, short-term bonds issued by Qualified Institutional Buyers (QIBs), and government securities issued by U.S. treasuries and agencies.
Gemini Dollar is a stablecoin that backs each Gemini Dollar with the equivalent of one U.S. dollar held in an audited and approved bank account, or 0.99 U.S. dollars, whichever is greater. It’s a cryptocurrency issued by Gemini, a US-based digital asset exchange and custodian owned and operated by the Winklevoss brothers (yes, those Winklevoss twins).
USD Coin is a stablecoin backed by the US dollar. It was developed by Circle and is supported by Coinbase, so you know it’s legit. This makes it a great choice for those who want to invest in cryptocurrencies without worrying about price volatility.
As they’ve mentioned before, USD Coin is a collateralized stablecoin—or cryptocurrency that has a 1:1 ratio of US dollars to USD Coin. When you buy USD Coin from an exchange like Bittrex or Poloniex (which they’ll discuss later), you’re really just buying its equivalent amount in US dollars from Circle and then sending those funds directly to Coinbase, where they are stored until you sell your coins back on the market for profit or withdraw them into your bank account.
MakerDao is a stablecoin that has been pegged to the US dollar. It is back by collateral and is use in the Ethereum blockchain.
MakerDao uses a smart contract to create DAI, which represents a value of one US dollar. When you pay for something with DAI, you get 1:1 USD worth of cryptocurrency back when you redeem it. If there are too many people wanting their coins redeemed at once, this process can take some time; but if there aren’t many users on their platform at all times (like right now), then MakerDao can act quickly and efficiently when creating new tokens for use by its users.
The crypto market is still in its early days, and many cryptocurrencies are still volatile. But with the introduction of stablecoins and other types of cryptocurrencies, users can feel confident about their investments.