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Stablecoins are a special type of cryptocurrency designed to maintain a fixed value over time. Unlike volatile cryptocurrencies like Bitcoin and Ethereum, stablecoins are pegged to a traditional ...
Stablecoins are a new and exciting way to take your cryptocurrency investments into the future. They offer you peace of mind by providing price stability, which means that these currencies will ...
DeFi offers an appealing alternative: open financial infrastructure that is publicly accessible, user-owned rather than privately owned, transparent, and cost-effective for businesses and users alike.
The value of stablecoins of this type is based on the value of the backing currency, which is held by a third party–regulated financial entity. Fiat-backed stablecoins can be traded on exchanges and are redeemable from the issuer. The stability of the stablecoin is equivalent to the cost of maintaining the backing reserve and the cost of ...
Terra is a blockchain that leverages fiat-pegged stablecoins to power a payment system. For consensus, the Terra blockchain uses a proof-of-stake codesign. [4] Several stablecoins are built atop the Terra protocol, [4] including TerraUSD, which was the third largest stablecoin by market capitalisation before its collapse in May 2022. [5]
Notably, these designs are not foolproof, as a number of stablecoins have crashed or lost their peg. For example, on 11 May 2022, Terra 's stablecoin UST fell from $1 to 26 cents. [ 50 ] [ 51 ] The subsequent failure of Terraform Labs resulted in the loss of nearly $40B invested in the Terra and Luna coins. [ 52 ]
If you feel you've missed the boat on investing in cryptocurrency, or just aren't ready for such a risky and volatile investment, you might consider investing in stablecoins. Learn More: 8 Best...
Decentralized finance (often stylized as DeFi) provides financial instruments and services through smart contracts on a programmable, permissionless blockchain. This approach reduces the need for intermediaries such as brokerages , exchanges , or banks . [ 1 ]