Many traders undervalue stablecoins, but this is a very strategic way to reduce the high volatility the sector is subject to.
For those who do not know, there are different types of cryptocurrencies. Not all of them are the same and not all of them serve the same purpose, while providing a common starting point such as decentralization.
When we talk about stablecoin, we mean a type of crypto pegged to an underlying asset that can be a FIAT currency or for example a commodity such as gold.
Their secret is the store of value: the price of this different type of crypto does not vary over time like that of a cryptocurrency such as Bitcoin.
This greatly reduces the high volatility of the crypto sector while still having all the advantages of a digital currency.
Best stablecoins of early 2023 to watch out for
Here is a list of the top 10 U.S. dollar-based cryptocurrencies to watch out for!
One of the most reliable and unwavering in the market.
Binance USD is a Stablecoin launched by CEO Changpeng Zhao’s famous crypto platform.
BUSD is pegged to the U.S. dollar and has proven particularly convenient due to the lack of fees when trading within the Binance platform.
To say that the platform itself is one of the most reliable on the Web3 seems superfluous.
This Stablecoin is a little different. Also being one of the most famous, DAI is pegged to USD because of the corresponding Ethereum reserves.
Well, when we buy DAI we should technically buy an equal amount of Ethereum in USD.
Developed in 2014, it has yet to betray itself, maintaining a ratio as close as ever to 1:1 with USD.
Who wouldn’t want a portfolio less prone to the high volatility of cryptos?
TUSD is the Stablecoin with a low market capitalization, about $743 million.
However TrueUSD, minted by the transparent company TrustToken in 2018, is one of the most liquid on the market!
It operates on Ethereum blockchain, thus being able to leverage its network and smart contracts.
Formerly known as Paxos Standard, it is now called Pax Dollar(USDP).
It is a Stablecoin that aims to help all entities and individuals who want to enjoy the digitization of the U.S. dollar.
USDP has always and forever aimed for transparency, with a 1:1 ratio, promoting itself as the ideal bridge from FIAT currency to blockchain adoption.
How can we not mention the famous USDT? Perhaps the best or most famous Stablecoin around.
Tether, or also USDT, has the U.S. dollar as its underlying and has long since established itself as the largest in the crypto market by market cap: about $65 billion!
Still in USD, Tether is also backed by other assets, including traditional currencies, bonds, and certificates of deposit.
Tether’s undisputed rival, USDCoin is another of the most important and recognized Stablecoins in circulation, with a market cap of $43.8 billion.
USDC’s strength is its transparency: every month an independent company confirms its available resources.
Currently, the reports are also searchable by the users themselves and can be exchanged between accounts as if we were doing a classic bank money transfer.
Here is another valuable consideration for our digital wallet. USDD is owned by Tron DAO Reserve and created by the founder of crypto $TRON.
Famous for being immediately popular, becoming the seventh Stablecoin on the market after only 7 months of launch!
Created by the crypto trading platform “Gemini,” some may shake their heads because of the recent earthquakes caused by FTX.
However, GUSD was created in 2018 and approved by the New York Department of Financial Services!
A US authority that still regulates it today, thus making it a bridge between traditional finance and Defi.
This is one of the most unique types of Stablecoin.
OUSD, in fact, was one of the first to offer yield farming while remaining within our digital wallet.
Certainly not among those with the most market capitalization, but with at least an “unproblematic” way forward.
It leverages the Ethereum network and is pegged to the U.S. dollar thanks to DAI, USDC and USDT.
Last on the list is about a loan-based protocol. Yep, Liquidity USD is a Stablecoin used to repay loans within the “Liquidity” protocol.
To borrow money all you need to do is deposit an amount in Ethereum and redeem the amount in LUSD with a ratio of 110%.
It might definitely be worth considering because even though it is at the end of this list, it is still one of the best Stablecoins around!
Because let’s not forget that unreasoned investments can lead to serious losses in even the most attractive markets.