Which Stablecoin is Best for You?
Stablecoins are at the very center of recentralizing decentralized systems, but they are still necessary in cryptocurrency until everything is priced in satoshis and things like the USD are considered antiquated trades of value. Until that happens, there are a variety of stablecoins out there, and they are not all created equal. Check out the following stablecoins and see which one works best for your needs.
USDT — Tether
Asset backing: United States Dollar
Market Cap: $1,900,000,000
Initial Start Date: February 2015
Markets: 400
Decentralized?: No
Overall Stability: Stable in terms of value to the USD; accused of market manipulation by printing excessive USDT to boost price of Bitcoin during 2017 bull run. Has had trouble providing proof of reserve cash for each printed USDT but did so in June 2018. Some speculate that this is not the whole picture.
Review
Love it or hate it, USDT is the most popular of all stable coins. Sitting in the top 10 by market cap, USDT was the original in the space and has stuck around for nearly 4 years. While the price of USDT has been fairly consistent with $1.00, Tether has received a fair amount of criticism for their potential role in market manipulation during the end of 2017. This role has been seen by many decentralized purists as one of the main reasons to look towards other stable coins or not trade in stable coins at all. Chances seem low that Tether will be going anywhere anytime soon.
TUSD
Asset backing: United States Dollar
Market Cap: $204,000,000
Initial Start Date: March 2018
Markets: 118
Decentralized?: No
Overall Stability: TUSD has had several times where the value fluctuated more than 5% against USD. It’s largest spike was over 30% to send one TUSD to $1.30.
Review
TUSD is widely popular among those that do not trust Tether for previously mentioned potential information and lack of proof of funds. TUSD is very centralized but is beneficial for those that want to convert crypto into fiat and get wire transfers directly from banks. Unfortunately, the minimum withdraw and deposit amount to utilize TUSD with a bank account is $10,000. If TUSD keeps their value stable in the future and lowers their minimum amount, they may begin to gain more popularity.
USDC
Asset backing: United States Dollar
Market Cap: $365,000,000
Initial Start Date: October 2018
Markets: 85
Decentralized?: No
Overall Stability: Fairly stable, one spike of 6% but never deviates more than a few percentage points.
Review
USD Coin was created by Circle and Coinbase in order to provide a more financially transparent stablecoin. While they are still the new kids on the block, Coinbase has shown to be a fairly reputable company with a longstanding history. If USDC can continue to remain stable and provides open reports about reserve funds on a regular basis, there doesn’t seem to be any reason why more traders won’t switch towards this stablecoin. However, due to the fact that they are so new, only time will tell if they can maintain their good reputation. If you want to purchase USDC, make sure to pick some up from Ethex here.
PAX
Asset backing: United States Dollar
Market Cap: $134,000,000
Initial Start Date: September 2018
Markets: 64
Decentralized?: No
Overall Stability: Fairly stable, although this is a fairly new stable coin.
Review
Paxos is another stable coin that has funds to back up each PAX it prints, but is unique in that it is regulated and approved by the New York State Department of Financial Services. The company that started PAX originally ran itBit, a crypto exchange since 2012. Since they have been in the space for a while, they are familiar with how stable coins work and what makes them operate well. The nice thing about PAX is that because it is an ERC-20 token, it can easily be stored in compatible wallets, such as MEW or Metamask. It has become widely adopted and may stick around if it can maintain stability.
DAI
Asset backing: United States Dollar
Market Cap: $71,000,000
Initial Start Date: December 2017
Markets: 57
Decentralized?: Yes, paired with CDP (Collateralized Debt Position) and governed by MKR.
Overall Stability: Highly stable
Review
Finally, a stable coin that isn’t fully centralized. DAI solved the problem that most true decentralization enthusiasts despise about stable coins. DAI isn’t balanced and managed by centralized banks that need to communicate with the blockchain in order to verify supply levels of USD. DAI is programed to be managed by a governance token (MKR), as well as hold a Collateralized Debt Position. What this means (in very simple English) is that DAI is backed up by MKR as opposed to being backed by funds within a centralized banking system. The system works beautifully in a decentralized manner, and there are many hopes that DAI will be the top trusted stable coin in the near future. DAI is available for purchase from Ethex.
GUSD
Asset backing: United States Dollar
Market Cap: $86,000,000
Initial Start Date: October 2018
Markets: 57
Decentralized?: No
Overall Stability: Moderately unstable. Several periods of time that value has spiked over 5% from $1 USD.
Review
If you love the Winklevoss twins and are all about government regulation, then this is the stable coin for you. Saying that this is centralized would be an understatement. Gemini USD is not only regulated with the US Government, but all assets are also backed within the State Street Bank and Trust Company. There is regularized audits and will be the main stable coin on the Gemini exchange.
EURS
Asset backing: Euro
Market Cap: $35,000,000
Initial Start Date: July 2018
Markets: 23
Decentralized?: No
Overall Stability: Fairly stable, few price fluctuations
Review
I know it may come as a surprise to many, but there are stable coins that don’t focus on the USD! EURS is the #90 ranked cryptocurrency on CoinMarketCap and focuses on the Euro. While less than a year old, it has remained stable. The bank accounts backing EURS are checked daily, along with quarterly verifications from a Big Four Company.
SGDR
Asset backing: Singapore Dollar
Market Cap: $15,000,000 from ICO
Initial Start Date: January 2019
Markets: Unknown
Decentralized?: No
Overall Stability: Too new to know the overall stability
Review:
Yet another coin backing a currency outside of the US Dollar, SGDR has just launched with backing of 1:1 for Singapore Dollars. With Singapore quickly turning into a crypto haven and maintaining its global business dominance, it is exciting to see a new stable coin that backs SGD. Blockchain startup Rate launched their ICO to start SGDR and received $15,000,000 in initial funding. Since there has been fairly consistent stability in the value of SGD, it makes sense to include a stablecoin for it. We will continue to watch the development of SGDR and have a future update in regards to it.
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