Hey friends,
To be sincere i am really enjoying this engagement contest, it always reminds me of the former weekly crypto academy contest. The main reason i love this contest is it takes me closer to my goal, I actually want to be a crypto guru and with the help of this contest am learning really fast. In the crypto market the stable coins can't be underestimated because it of high value and importance to the stability of the crypto market.
One thing that makes me like the Crypto world, is that most of its related terms are self explained. Just like most crypto terms stable coins can be easily defined as stable coins. In a more professional manner i would define stable coins as a crypto asset that was created with a specific way that makes them far less volatile and instable when compared to other crypto currencies.
Using a commonly used term i would say stable coin are usually pinned or pegged to an external asset for example the famous USDT is said to be pegged to an external currency the USD, This really helps the Crypto martet strive to a great height. The stable coins is very important because it's used to perform a special skills in the crypto market.
If you are a crypto trader ( People who buy and sell crypto asset/ coin for different reasons), you would understand where i am heading to. For the sake that i want everyone to properly understand, i am giving another example with our day to day activities, in our various counties , environment or location we use money (Naira, Yen, Dollar Or Pounds etc) to buy goods and pay for service, this is same way we use stable coins to buy crypto assets in the Crypto market.
And how did you manage to ensure a stable price?
The main reason why the ensure a stable price is because they are pinned or pegged to an external stable currency or asset, so therefore if the external currency or asset the are pegged to start to experience high volatility, they stable coin also start to move in a volitile. So therefore their stability of a stable coins depends on the type of stable coins and the external currency which eas use used to peg the stable coins
In the simplest manner i would say stable coins was created to help create stability in the crypto market, just imagine staying in a country where there are different currencies, for example let me use the united state of America, just imagine some citizens use Naira, some trade with Pounds, some trade with Yen while the rest people trade with dollar and there is no any generally accepted currency like the United State Dollar. In the above situation the economy of the United State would drop drastically because of instability in their currecy, this i exactly Same role the stable coins play in the crypto market.
The stable coins gives the market a structure and format in which transactions would occur on the market, this is what other coins can't assure you. Stable coins also help reduce chances of losing your money accidentally, for example just imagine there were no stable coins and someone wants to send money into his Crypto exchange. This user don't have a coin in mind to buy but she wants to credit her crypto wallet, if this user buys a volatile coins, in the next 1hour the worth of the user money would definitely flutate and that's might cause a big loss to this innocent user.
In the crypto market there are so many stable coins in the crypto narket, in fact most Blockchain creates it's native stable coins. For example the Steem Blockchain native stable coins is SBD Steem Backed Dollar, Tron Blockchain stable coin is known as USDD and at same time most crypto exchange has their own stable cins for example Binace developed the BUSD aka Binace USD.
Steem Backed Dollar (SBD)
When i called the name SBD, i expected fellow steemians to know what am taking about, Although new steemians my might still be confused 😕 because they didn't meet steemit in it's booming days. My lovely SBD left us since the whole crypto market went bearish months ago but i believe it would come back very soon
USDD
This is another awesome stable coins that was built recently, this coin was owned by a crypto Whale who happens to have the tron Blockchain. His name is "Justin Sun". USDD has actually been facing so many up and down but the last time i check it's has regained it's supposed postion
USDT
As long as i am concerned USDT is the most famous stable coins in the crypto market, it not just popular for nothing. It popularity came because of it success rate, it broke records of older stable coins like Bit USD and and Nubits,it was launched same year with the first set of stable coins, so therefore i am not wrong to say its one of the oldest stable coins.
BUSD
This is one of the most famous stable coins after USDT, it was developed recently by Binace exchange. This stable coins have been doing well recently and it has tried it's best to remain pegged to USD, the stable coins was initially developed to help run transaction smoothly on Binace Exchange.
Yes of course, some many stable coins has experienced instability in the past, while some after much struggling regained stability, others never regained stability. Infact i am right to say 98% of stable coins faced drastic instability that was so scary to crypto trader or crypto investors that kept the money in stable coins, for example UST, USDT, Bit USD all experienced instability.
UST
The most famous stables coins that has experienced good old days but is now experiencing terrible bullish trend because of some unwanted attacks. UST is the official stable coins for the Luna Blockchain, some years earlier the Blockchain was so flourishing that every one admired it and all investors wanted to join the Blockchain. Although it has been suffering attacks from so many intruders but the last attack was so hash that it left the Blockchain so devasted and lesser value.
SBD
This is steem Blockchain official stable coins, it was created to help stabilize the Steem Blockchain. SBD was actually designed to be same price with USD but due to some issues, SBD rose higher than the price of USD, see therefore it lost it stability. Hopefully me and every well meaning steemians believe that it would retrace to it supposed price which os SBD 1: 1 USD.
USDT
After the famous UST crash, the crypto Market went trembling causing crypto currencies like Bitcoin to go bearish, this bearish trend also caused stable coins like the powerful USDT lose it peg, by going below 1 dollar as initial expected.
Just like most project wherether natural or artificial, stable coins has so many Advantages and Disadvantages, but i will just be talking about few.
Stable coin has no restrictions.
When i talk about no restrictions, i mean the stable coins can be used all over the world, despite your religion or culture. In other words stable coin act as a generally accepted currency all over the world, this is because as a Nigerian i can buy, sell and trade with a stable currency just as anyone from any country can buy, sell and trade with any stable coins of their choice.
Stable coin are transparent.
Stable coins were all developed on public Blockchains, where every transaction can be seen by any one from any part of the world. This makes stable coins very safe when performing a transaction.
Stable coins are less volatile
They is actually the reason it is called stable coins, unlike other crypto asset like Bitcoin, Steem, Tron or Ethereum. Stable coin are less volatile, this make them remain pegged from atleast some period of time, the chance of a stable coins to increase or reduce price are very low because they price changes only when the traditional financial asset it's pegged to also change price.
Stable coins has faster transactions
Transactions Stable coins are really faster when compared to that of traditional assets, due to the facts that stable coins are built on Blockchain technology, the inherit the speed of which Blockchains use to perform transactions.
Stable coins can experience Centralized influence
Many stable coins are created by either centralized organisation or individuals, this fact makes it really risky because this bodies can decide to run away with people investment because the have control of the stable coins
Stable coin depends on traditional asset
Its really true that most coins are pegged to external traditional financial assets like USD, this is really a big disadvantage because as soon as the USD faces economic crash or crisis, they stable coins automatically changes it value
Blockchain technology would have not gone this far without stable coins and this is the reason most Blockchain develop their of stable coins, the importance of stable coins can't be underestimated. I am really glad participating in such lovely contest, thanks for going through starrchris care's ❤️.
I am inviting @malikusman1, @steemdoctor1, @simonnwigwe, @preye2, @lavanyalakshman
Thank you, friend!
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Upvoted! Thank you for supporting witness @jswit.
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Hi friend @starrchris thanks for sharing your understanding about the topic.I learned a lot from your post and simple explanation.
Due to the stability of the coins they are used in the trading and are considerd as the trusted coins.Many of the people preferred stable coins beacuse there are not rapid fluctuations of the prices occurs while making the transaction like other cryptocoins.
Good point stable coins has the vast use and can be used without any border limits they can be used in great range.
You have written well about the topic.Thanks for sharing and Good luck for the contest.
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😲 wow , I am glad 😊 you find pleasure in my post. Yea stable coins are really the best, their low volatility gives them an edge.
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Thank you ☺️😊 very much @steemcurator01, but I think they was little mistake in my rewards.☝️. I mean I scored 1st.
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