The State of Stablecoins Research Findings

The State of Stablecoins Research Findings

Blockchain.com released the results of its study on stablecoins. Here are some of the takeaways from the research

In the recent past, the amount of projects with regard to stablecoins has grown. There are a total of twenty-three stablecoins actively trading in various exchange platforms while sixty percent are in pre-launch. Its overall market value is an estimated $3 billion. This amount comprises of 1.5 percent of the total cryptocurrency market value.

As the development surrounding it is still new, additional experimentation is necessary to create a perfect stablecoin. Successfully addressing market volatility is one benefit that traders can anticipate to when it comes to stablecoins in the long term, this is according to the study.

Stablecoins rely on the security, compatibility and infrastructure of other cryptocurrencies such as Bitcoin and Ethereum.  This makes it more of a compliment to cryptocurrencies rather than a direct competition.

Tether

Tether (USCT), with about 60 percent of Bitcoin’s trading volume, is the second most traded cryptocurrency in the market. This equals to the 98-99 percent of stablecoin trading volume altogether.

Its market cap has increased from $7 million (2017) to $2.7 billion (2018). The research noted this is due to the USDT being used as a risk management and hedging tool.

AAA Reserve, Stably, TrueUSD, and USDC are the most similar stablecoins to USDT.

TrueUSD

TrueUSD (TUSD) is the number two stablecoin in trading volume and listings. Although it does not hold a USD reserve, its partner banks and financial institutions are obligated to store its funds in an escrow account. With every minted or burned TrueUSD, 0.1 percent fee goes to TrustToken. TrustToken is the platform that tokenized TUSD.

Tether, AAA Reserve, and Circle USDC are the most similar stablecoins to TUSD.

DAI

DAI launched in 2017. The research suggests that this stablecoin does not carry the same counterparty risks or traditional banking risks as that of Tether. It is generated from an intrinsically decentralized system and is backed by Ethereum (ETH). There are two major concerns on DAI: the scalability of its economic model and if the collateral used by DAI is enough to protect it from a large scale market crash.

Augmint, BitShares, Havven, and Reserve are the most similar stablecoins to DAI.

Basis

Basis is one of the soon to be launched stablecoin. The three elements contributing to the Basis stability system are: its stablecoin (Basis token), bonds, and shares. Its expansion will happen by the time the price of its token goes above $1.

In the near future, which according to the research report will perhaps take years, this stablecoin will depend on a blend of off-chain and on-chain stabilization mechanisms. Further in the future, Basis endeavors to be a fully decentralized protocol.

It has gained much awareness from crypto traders due to its impressive brain trust, innovation, and fundraising.

Carbon, Fragments, and Kowala are the most similar pre-launch stablecoins to Basis.

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