Top 5 Stablecoins That Will Shock The Crypto World
We all know that Stablecoins are digital assets that have a stable value. Examples of this are fiat currency or government-issued currency, like the US dollar. So you’re probably thinking about how these coins will blow your mind. Well, you’re gonna be surprised because there are some really crazy and innovative ones these days. And they’re nothing like USDT, USDC, or DIEM. The best part of this is that there are plenty of ways to make money with them. Not only by holding them but by buying their associative governance tokens. And if you want to check these Stablecoins, you can use a crypto trading platform and start your buying and trading career through it. It’s very easy and comfortable to use, so you can also keep updated on cryptocurrency. There are many sites in the market like Bitcoin Profit that help you connect to legit and trustworthy brokers to start your trading journey in a safe and smooth way. Here is a list of the special Stablecoins that you have probably never encountered yet, and it will give you a heads up so you can take advantage of that as well.
Everyone needs to be convinced on why Stablecoins are important. Cryptocurrency is extremely volatile after all, and Stablecoins can provide protection from a market crash.
So here are the 3 main types of Stablecoins.
- Fiat collateralised – Stablecoins that are backed by fiat money, like US dollars, that is controlled by a central entity.
- Crypto collateralised – Stablecoins that are backed by cryptocurrencies and controlled by the decentralised protocol.
- Algorithmically controlled – Stablecoins that don’t have any collateral but instead they adjust the token supplies to keep the price pegged.
Nowadays, there’s a lot of innovation and experimentation going on in the Stablecoins phase. People see room for improvement for existing stablecoin, and they build better ones with more features tied to them or more decentralised. So here’s the list of the top 5 Stablecoins that you might have never heard of before
Don’t get confused, and this is not the USDP associated with the Pax dollar. This is the one made by Unit Protocol, the same symbol but completely different projects. Unit Protocol is a decentralised protocol that allows you to mint stablecoin USDP using a variety of tokens as collateral. They let you deposit a huge selection of coins as collateral for a USDP loan.
Each coin has a different risk level, so the amount of USDP you can borrow for every dollar worth of collateral is different. The system could be perfect for you if you have some tokens that you don’t want to sell, but you want to borrow stablecoins from them to do margin trading. They also have a token called DUCK, which is used for governance, but you can also stake it and earn fees that are collected by the protocol.
Rai Reflex Index (RAI) is an Ethereum that aims to maintain a stable value. It is the first of its kind, a stablecoin that’s not trying to be pegged to a specific target like the US dollar. It’s free-floating and influenced by market forces. Their ultimate goal is to be crypto native, and governance minimise crypto-asset does not attach in fiat currency. What is unique about RAI is it has an autonomous price controller that is on-chain. So no need to rely on humans for bad governance.
Liquidity USD is a USD pegged stable coin that’s part of the liquidity protocol. They let you take out loans against their ETH and their LUSD stable coins. This is so unique. First, their loans have 0% interest, which is good for borrowers because they only have to pay an issuance fee. Second, their minimum collateral ratio is only 110% per cent compared to other protocols that are required 130%-150% per cent. Third, they require zero governance because it is all hardcoded. So no one can change anything, and regulators can’t come after anyone for this. So if you wanna make money in the system, you can do arbitrage deposits funds in the stability pool or be a Staker.
They are the world’s first fractional reserve stablecoin which is pegged to the dollar. Part of its supplies is backed by collateral, and the other part is controlled algorithmically. The ratio of the Algo portion to the collateral portion depends on the price of their FRAX stablecoins is. If it is above 1 dollar, the protocol decreases the collateral ratio, while if it is below 1 dollar, it increases the collateral ratio. This is all done with minimum governance and is mostly controlled by an autonomous algorithm. They do have an important governance token that is called Frax Share (FXS). It involves the minting and redeeming process along with USDC. You can also earn FXS for providing liquidity to certain trading pairs.
Alchemix USD or (alUSD), this is a synthetic stablecoin that is backed by future yield. Their parent protocol is Alchemix finance, and you can get loans that repay themselves over time. So no one ever gets liquidated; the only debt here is the time that you have to wait for the auto repayment to finish, or you can pay it earlier if you want. How it works is very simple, you deposit DAI to mint alUSD, and then your collateral is sent to yearn finance vaults to earn yield, which repays your loan over time. You can swap your alUSD to DAI 1-to-1 in Alchemix or you can trade it to Sushiswap.
What can you do to make money with these stablecoins?
The easiest thing to do is buy their associative governance tokens because those can fluctuate. They aren’t stable or pegged like their counterparts. Keep in mind that the success of this token will likely depend on how much adaptation their stablecoin gets. And even then, there’s no guarantee that adaptation will translate into great price performance. And finally, the most advanced thing is participating in their system like Arbitrageur, Liquidity provider, or Staker. If you think this project is completely experimental, it can face a black swan event that crashes their token. So do a lot of due diligence and be sure to manage the risk properly.
Everything mentioned above is different types of stablecoins, but still, at the end of the day, it is always you who can decide what you will do with your assets. One thing that is sure of is that stable coins are an area where you can put your cryptos so that you are not hit by volatility. It is a safe place where you can minimise your risk for trading. So you don’t have to be scared if there’s gonna be a market drop and what’s interesting about that is you can also use a certain stable coin to transfer your assets by using a smart chain. And the cost for sending out that cash is literally low. So if you want to use it as a sort of medium of exchange or if you want to look at it from a remittance standpoint, you can actually use that stablecoin. There are a lot of choices and it differs in their uses. So always do research and choose what’s the best stablecoins you’re gonna use in your transactions.