, 2 years ago
Cryptocurrencies are highly volatile, which offers great opportunities for trading. Still, sometimes you would like to preserve the value and don’t want to risk any up-or downside. What are stablecoins and what do they have to offer?
Stablecoins offer a lot more options then regular currencies. They can be stored and transferred peer-to-peer just like regular crypto. At the same time, they represent the stable value of the underlying asset. For one instance, one USDT is backed by one real US-Dollar held by the company Tether.
But there are also different and decentralized stablecoins that don’t require a trusted third party. Maker DAO and the stablecoin DAI is such an example, but also Heaven Protocol and its assets like xUSD, xGold or xSilver.
These examples show that the underlying assets doesn’t have to be necessarily a fiat currency, but can also be a commodity as well. Aside from these qualities most stablecoins share the following features:
With these features stablecoins are most suitable to settle payments without risking any loses due to volatility. They also have a very important role in decentralized finance applications, since they can represent different assets.
This way it is possible to use Bitcoin with a stablecoin like WBTC and lock it into a liquidity pool for yield farming, for instance. It allows to hold BTC, while at the same time interacting with the Ethereum blockchain and one of its many DeFi protocols.
Another option is to use stablecoins for trading, because they represent the value of the US-Dollar or Euro. They become faster available to traders than a traditional wire transaction.
The short answer is no. While LiteBit credits offer you a very convenient and fast trading experience they are serving a similar purpose, but they are not representing the Euro. They are also only available on our trading platform.
Unlike a stablecoin they cannot be transferred or redeemed. Instead they can be sold for or bought with Euros or crypto like Bitcoin. As the name suggests, they serve simply as store credit and are not to be confused with existing stablecoin solutions.
Nov 07, 2022
Stablecoins are a vital part of the broader DeFi economy. Many assets on decentralized exchanges are denominated in “stables”. This is a trend that has set in three years ago. Before that time most crypto assets were either denominated in BTC or ETH. That is not the only reason why stablecoins have become important and serve as a pillar in the crypto economy.
Oct 18, 2022
Synthetix is a DeFi application that could possibly contribute to a lot of use-cases that are not typical for this sector and in this article, we are going to explore its features.
Oct 11, 2022
Stacks is a layer-1 blockchain that makes the execution of smart contracts possible. Unlike well-known smart-contract blockchains like Ethereum or Solana, Stacks builds on top of Bitcoin. Even though they're separate blockchains, Stacks and Bitcoin work together.