Infographic: A simple comparison of today’s top stablecoins
With a surge of stablecoin ideas entering the cryptocurrency space, it’s time to take a step back and look at how each of them matches up against each other. It seems as though new projects like these are popping up on a daily basis, and it’s easy to get overwhelmed with the many details of each coin structure. These details include decentralization, enforceability, price fixing, method of supply control, level of regulatory influence, tokenization, fee structures, scalability… the list goes on.
However, for today’s purposes, we’re going to solely look at the first two characteristics: Decentralization and Enforceability. Both of these characteristics are fundamental to the long-term success of any stablecoin.
As we know, the level of decentralization plays a key role in the resilience of any coin project. This is one of the very reasons cryptocurrencies were created in the first place, and continue to be a success today. Measuring decentralization can be very difficult in this area. As a rule of thumb currencies backed by assets (such as gold) or pegged to a national currency typically carry a lower level of decentralization. Anything backed by code tends to have a higher level of decentralization.
Meanwhile, enforceability is another key characteristic of a stablecoin’s success. When the demand or volume of any currency changes radically, how does well does that system adapt to enforce its price? A variety of different mechanisms can be used within these stablecoin projects… anywhere from 3rd party custodians who manage backed-asset reserves to a currency supply which is controlled via algorithms or even the users themselves. Generally speaking, asset-backed systems are less enforceable than algorithmic or voting based ones.
With that in mind, here is a simple comparison of a few of the popular and innovative coins to see where they line up with these two metrics, on a simple scale of 1–10:
