Topic: Stablecoins and the path towards mainstream adoption (Read 110 times)
I totally agreed, Stable Coin is one of the best chance to make cryptocurrency actually become mainstream. However, I have not met a stable coin that is not shady. As we know that the first stable coin that is popular is Tether, but then it turns out the project is full of controversy. I believe it will leave some marks and some kind of trauma in the cryptocommunity.
Stablecoins are very helpful and useful, though many are saying they are not totally stable in price.. But, if there is a stablecoin with real value, making crypto useful as fiat for the eveyday life, then more solid investors will come to the market. This is a good thing!
Now, regarding the model, I believe it is way better to back crypto-assets with real gold and precious metals instead, like in the current Gigzi ico project. Gold has a more stable price compared to fiat. So volatility can be way lower. Moreover, Gigzi using "Tokenized Precious Metals" model to make sure total supply in crypto-assets has its convenient supply in Gold (stored into the gigzi treasury app).
Now, regarding the model, I believe it is way better to back crypto-assets with real gold and precious metals instead, like in the current Gigzi ico project. Gold has a more stable price compared to fiat. So volatility can be way lower. Moreover, Gigzi using "Tokenized Precious Metals" model to make sure total supply in crypto-assets has its convenient supply in Gold (stored into the gigzi treasury app).
I believe you are right. For there to be full adoption, there must be stability. No body wants to buy into an investment that is too volatile but with stable coins such as usdt getting more stable, confidence and assurance can be found in investors
In the short-term, stability allows for people to transact in a practical way, and the long-term stability enables other important financial functions such as loans and credit.
For example, decentralized cross-border lending can occur through the introduction of a stable cryptocurrency. This removes the problems seen with popular high volatility cryptocurrencies that creates an uncertain lending environment as borrowers and lenders cannot comfortably plan neither for the short nor the long-term future.
Why do we need stablecoins? What are stablecoins in the first place?
Essentially, a stablecoin is a cryptocurrency that is pegged to another asset (e.g. gold, silver, the U.S. dollar, another cryptocurrency, etc.). It is a global currency which is not tied to a central bank and, as opposed to other cryptocurrencies that are often highly volatile in nature, a stablecoin should have as low volatility as possible.
The ultimate goal of a stablecoin is to become a digital form of fiat-free cash that is exceptionally stable in value.
Why we need them?
As a stablecoin has low volatility against the world’s most important national currencies, it can potentially unlock untapped benefits for a decentralized Internet.
In the short-term, stability allows for people to transact in a practical way, and the long-term stability enables other important financial functions such as loans and credit.
For example, decentralized cross-border lending can occur through the introduction of a stable cryptocurrency. This removes the problems seen with popular high volatility cryptocurrencies that creates an uncertain lending environment as borrowers and lenders cannot comfortably plan neither for the short nor the long-term future.
Different type of stablecoins
There are three main models of stablecoins:
- Fiat-collateralized
- Crypto-collateralized
- Non-collateralized (i.e. seigniorage shares)
For example, decentralized cross-border lending can occur through the introduction of a stable cryptocurrency. This removes the problems seen with popular high volatility cryptocurrencies that creates an uncertain lending environment as borrowers and lenders cannot comfortably plan neither for the short nor the long-term future.
Why do we need stablecoins? What are stablecoins in the first place?
Essentially, a stablecoin is a cryptocurrency that is pegged to another asset (e.g. gold, silver, the U.S. dollar, another cryptocurrency, etc.). It is a global currency which is not tied to a central bank and, as opposed to other cryptocurrencies that are often highly volatile in nature, a stablecoin should have as low volatility as possible.
The ultimate goal of a stablecoin is to become a digital form of fiat-free cash that is exceptionally stable in value.
Why we need them?
As a stablecoin has low volatility against the world’s most important national currencies, it can potentially unlock untapped benefits for a decentralized Internet.
In the short-term, stability allows for people to transact in a practical way, and the long-term stability enables other important financial functions such as loans and credit.
For example, decentralized cross-border lending can occur through the introduction of a stable cryptocurrency. This removes the problems seen with popular high volatility cryptocurrencies that creates an uncertain lending environment as borrowers and lenders cannot comfortably plan neither for the short nor the long-term future.
Different type of stablecoins
There are three main models of stablecoins:
- Fiat-collateralized
- Crypto-collateralized
- Non-collateralized (i.e. seigniorage shares)
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