A stablecoin is a cryptocurrency that is often pegged to another stable asset, like gold or the U.S. dollar. It’s a currency that is global, but is not tied to a central bank and has low volatility. This allows for practical usage of using cryptocurrency like paying for things every single day.” Sherman Lee
“Any application which requires a low threshold of volatility to be viable on a blockchain, consumer loans for example, simply cannot be denominated in a currency which fluctuates 10–20 percent in a day, like Bitcoin and Ether.” Gregory DiPrisco from MarkerDAO
What stablecoins do exist today?
There are several projects working on bootstrapping a stablecoin and each one has their advantages and disadvantages. Let’s explore some of the more popular stablecoins in more detail.
Tether is a stablecoin with a 1-to-1 peg against the USD, whereas the conversion rate is 1 Tether USDT equals $1 USD. For every Tether USDT in circulation, $1 USD is added to a centrally managed savings account as a collateral. However, some people doubt that Tether is actually fully collateralized.
RE: Stablecoins Explained