How do Stablecoins work? | 10% for @tron-fan-club
The price of a coin that is stable coin is much more stable. Unlike other cryptocurrencies, its prices do not fluctuate. The stable coin is designed to be fairly stable and within a 1: 1 USD peg. Because most of the time the cryptocurrency market is volatile. Rising or falling prices of various cryptocurrencies are a common occurrence in bear markets. Which leads to a kind of frustration among investors. So Stablecoin is designed to provide investors with a stable and secure place to relax.
How does Stablecoin work?
Stable coins are very different from cryptocurrencies. Usually we see stable coins. One such known coin is USDT and the other is Binance USD. That means we see stable coins. One of them is a stable coin backed by a Fiat currency or bond or reserve with commercial paper and the other is a stable coin backed by crypto tokens. These are assumed to be fixed assets, maintaining an exchange rate of 1: 1 with the US dollar.
Stable coins depend a lot on reserve currency. Because the amount of stable coin reserves is also very important! Although it is difficult to get a full account. Do they have enough dollars to back up all the digital currency! The work of stable coins also depends on this. However, due to the current cryptocurrency volatility, investors have lost faith in Luna as its price has fallen, which has affected the price of TerraUSD. Prices have dropped by about 30 cents. However, when people start buying stable coins, the price stabilizes. However, if investors invest in this coin, then its price is very stable. And besides, if there is confidence in the native coins then it is stable.
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I am Md. Kawsar Hasan. I am a Bangladeshi. I feel very comfortable to introduce myself as a Bangladeshi. An assistant teacher by profession. A writer intoxicated. So I feel very comfortable writing content on different topics. It’s great to know the unknown and learn something new. Love to travel.
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Thanks for refreshing my knowledge about the lesson,it always good to understand the basics.
Thanks
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Thanks for right information
I myself have just been traumatized by the stablecoin, namely USDT which is under the Terra network and of course I have suffered quite a lot of losses.
This is bad news. Hopefully you will profit next time
There are two types of stable coins which are algorithmic stablecoins and the normal stablecoins which are backed by dollars in bank accounts. Algorithmic stablecoins are backed using cryptocurrency reserves with an additional mint and burn mechanisms on the blockchain thus making it totally decentralized unlike the other type of stablecoins.
Thanks for more information