Contest Alert 📢: S4B Crypto Contest - Season 16

Greetings to you all steemains how are you all doing today I hope you are fine and in good health, today I will be taking part in the crypto contest season 16 organize by @waqarahmadshah

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Stable coins are a type of cryptocurrencies that are peg to an external market value of another commodity or currency, and in other words they tend to be more valuable than other volatile cryptocurrencies as a medium of exchange and example of currencies and commodity that they are being peg to are US dollar, gold, oil etc.

Now this is one of the most asked questions in the realm of cryptocurrencies by investors, how do stable coins maintain their value?.

But you know according to research I have learnt that stable coins maintain their market value through collateralization mechanisms, algorithmic adjustments, and balancing market demand and supply.

In a sense that it maintains their stability through maintaining and keeping in observation reserve assets as collateral or through algorithmic formulas that are supposed to control supply of the particular assets

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When it comes to the use of stablecoins it can range from as a means or medium of exchange, store or retain of value and as a trading asset. It also provides the speed and security features on a blockchain and lastly also eliminate certain volatility of other cryptocurrencies.

A stablecoins liquidity is only aimed at providing liquidity for stablecoin pairs in a decentralized manner or pool of funds and this pools are being managed by an automated smart contracts which comprises of stablecoins and other cryptocurrencies that also provides liquidity on the blockchain.

^{This will be the end of my entry and I will like to invite
@damisvilladiego
@starrchris
@memamun}