STABLECOIN - Stable solution for the uncertain world of cryptocurrency
🤔So what is Stablecoin?
Simply put, a Stablecoin is a cryptocurrency whose value is pegged to another stable asset, for example fiat currency (USD, EUR, JPY) or precious metals (gold, silver). Thanks to that, Stablecoins have a relatively stable value and are less affected by fluctuations in the cryptocurrency market.
✅There are two main types of Stablecoins:
🔸Stablecoins are backed by fiat currencies such as Tether (USDT) with 1 USDT always guaranteed to be equivalent to 1 USD.
🔸Stablecoins are backed by collateral like MakerDAO (DAI) with the value of DAI adjusted based on the value of ETH.
✅Benefits of Stablecoins:
🔸Stabilize value
🔸Used to pay for goods and services
🔸Plays an important role in the field of Decentralized Finance (DeFi)
👉👉However, Stablecoins also have some potential risks:
🔸Risk of the issuer
🔸Regulatory risks
With the continuous development of technology and the improvement of the legal framework, Stablecoins are expected to play an important role in promoting the development of the cryptocurrency market in the future.