Talk about an exciting crypto type is what got me to writing this article.
The USP of this type of crypto is that unlike others, it is stable in its price. Strange, right?
Stable in the sense that its value in USD or EUR doesn’t fluctuate like Bitcoin and Ethereum.
But there is more to it.
Stablecoins are a new genre of cryptocurrencies which weren’t thought of or were not possible before. And now, after 10 years of the launch of first successful cryptocurrency Bitcoin, you have a plethora of options to choose amongst stablecoins.
Stablecoins, as we discussed earlier, are of three types. I am not going to get into detail again, but I will leave you with the link to my previous article: What are StableCoins
The year 2019 saw an increased adoption of stable coins as it has immune to high volatility of Bitcoin, Ethereum and now there are services that let you earn interest on these stable coins.
- Crypto.com – Offers interest up to 8% Per annum on all popular stablecoins.
- Compund finance: Offers intrerest on DAI, USDT and few other decentralized stable coins.
Unlike earlier days, now users are not liquidating their crypto in fiat, rather using stable coin to keep them and often use it directly to spend for their purchases.
Today, we are going to look at some stablecoins in each category to understand them better.
At the last time of updating this guide, here are best Stablecoins:
- USDT (Tether)
- USDC (Launched by CoinBase)
- BUSD (Launched by Binance)
- SAI (DAI) (Decentralized Stable coin which is Colletralized)
6 Best Stablecoins In The Cryptosphere
1. Tether (USDT)
Tether is the first well-known stablecoin which started in early 2015.
It is a fiat-collateralized stable cryptocurrency, meaning, it is backed by fiat currency in a 1:1 ratio. And USDT token, which is also an ERC-20 token, is backed by US dollars in 1:1 ratio and is believed to be maintained by this team.
But controversies have surrounded Tether over the last year where it has been found that Bitfinex, a popular Bitcoin exchange, is behind stablecoin. And they have been using it o manipulate the markets as fiat-collateralized stablecoins are the easiest to manipulate.
Plus, they have been issuing millions of USDT without proper audit process in place which seems contrary to their initial promise.
Also see: Best Tether USDT Wallets
Nevertheless, it the most widely used and adopted stablecoin right now in the crypto market with a humongous market cap that puts it in top #10 of CoinMarketCap.
2. USD Coin (USDC)
USDC is a stable coin which is pegged with USD 1:1. This stable coin is brainchild of CENTRE which is managed by Coinbase and Circle. USDC is available on all exchanges including:
USDC is based on Ethereum and is distributed as Ethereum token. The US dollar reserves for USDC is audited every month by Grant Thornton LLP, an acocunting firm and you can see the latest audited report here.
3. TrueUSD (TUSD)
TrueUSD, as its name suggest, is another USD-backed ERC20 stablecoin.
On the first look, it seems just like USDT but unlike it, TrueUSD is fully fiat-collateralized, legally protected, and transparently verified by third-party attestations.
Their attestations are made public regularly and anyone can receive the reports on Twitter:
— TrustToken (@TrustToken) July 3, 2018
The token is managed by real people who have worked previously with Google, PwC, and UC Berkeley. (See here)
The company plans to tokenize other real-world assets such as TrueEuro, TrueBond, TrueYen, etc. so that stability can be brought to the volatile world of cryptocurrencies.
TureUSD’s market cap currently is quite humble as compared to USDT and sits in top 150 cryptocurrencies at the moment, but its acceptance is increasing rather swiftly as the crypto market is expanding.
4. MakerDAO (SAI & DAI)
MakerDAO is a decentralized autonomous organization which has proposed a new approach for making stablecoins.
MakerDAO started in early 2017 and proposed to peg its stablecoin, known as DAI to US dollar. However, it is not backed by USD like USDT or TUSD. Instead, it is backed by Ethereum.
So that’s why it is a classic example of stablecoins that are backed by other cryptocurrencies and are known as crypto-collateralized stablecoins. More over, it brings the true decentralized nature of crypto.
But MakerDAO and DAI have been criticized for being highly complex to be understood by other market players. Their model is becoming popular in 2019 and becoming a basis for DeFi.
You can actually use a DeFi system like Compound.finance to earn interest in DAI Lending. You should read my earlier guide on how to earn an interest in Bitcoin and Cryptocurrencies to learn more about this.
Carbon is another price-stable cryptocurrency which is a non-collateralized stablecoin too.
But it is not based upon the standard blockchain that we have seen so far. Instead, it is hosted on Hashgraph. (Read more about Hashgraph here)
Carbon achieves its price stability by an algorithmic biding which helps in consensus and figuring out the right price of each Carbon.
It also contracts and expands its supply based on the data points received through the algorithmic biding with the help of smart contracts.
Through this, their mission is to create a more inclusive and efficient global economy by using Carbon as a trading pair, global payment network etc.
Havven seemed to me like a unique stablecoin, but on further digging, I found that it is a crypto-collateralized stablecoin.
Their approach, however, is very different. It uses the maker/taker market philosophy to achieve the required stability.
Havven has implemented the two token structures to implement its stablecoin – Havven and Nomin. Nomin is the stablecoin, Havven the crypto collateral.
Havven has a fixed supply and Nomin (or eUSD) has the floating supply and derives its value from the Havven collateral. And as it is eUSD, its value is pegged to USD’s value.
Havven holders collateralize the Havven in a distributed way and receive the transaction fee from eUSD users (Nomin users).
They are also responsible for contracting and expanding the supply of Nomin, based on the number of Havven’s collateralized.
Ownership of Havvens grants the right to issue value of Nomins proportional to the dollar value of Havvens placed into escrow.
Conclusion: Top Stable Coins
I believe stablecoins have a long way to go in proving their worth and usability in the long term and that will happen on in events of the crisis.
What kind of crisis?
Well, I don’t know that, but the financial world calls it the black swan event.
So far TrueUSD, USDT, USDC, DAI are doing an excellent job though there are some controversies and arguments about their long-term sustainability.
Lastly, there is, of course, a need for a stablecoin in the market that works irrespective of the conditions in the cryptosphere and is easy to liquidate.
Now you tell me: What do you think of stablecoins? Have you used any of these stablecoins before? Which of these will survive the hard times? Do you know anymore stablecoins that I have missed here? Let us discuss in the comments below 🙂
Here are a few other hand-picked articles that you should read next:
- Best Ways To Convert Bitcoins To Cash [Fiat]
- Top Crypto Portfolio Rebalancing Tools (Automated & Manual)
- Understanding Protocol Coins And Tokens – The Beginners Guide
- The 5 Best Automated Cryptocurrency Index Funds (Updated)
An award-winning blogger with a track record of 10+ years. An international speaker and author who loves blockchain and crypto world.
After discovering about decentralized finance and with his background of Information technology, he made his mission to help others learn and get started with it via CoinSutra.
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