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A Detailed Stablecoin List Powering Decentralized Finance

Michiel Mulders
July 11, 2020
stablecoins, earn crypto, crypto earn

Stablecoins created a niche for itself in the growing market of cryptocurrencies. The demand for stablecoins has grown tremendously since the introduction of the first stablecoin in the market. 

As per a Forbes report, there are 134 coins in the stablecoin list of the crypto market now and that's a considerable rise from just a handful of them a few years ago. However, it is to be noted that just 30% of all stablecoins are currently being traded now. 

This article covers a stablecoin list of 6 major coins. All stablecoins that we are covering here are leading the stablecoin market of today. 

#1. Tether (USDT)

Tether is a fiat-backed cryptocurrency. The total value of its crypto coin circulation is backed by an equivalent amount of fiat currencies such as the USD, the Japanese yen, and the Euro. The current market cap of USDT is $9,194,969,266 and 9,187,991,663 USDT in circulation now. It surely finds mention among almost all top stablecoin lists available in the public domain. 

Initially, Tether was launched as Realcoin in July 2014. However, it was rebranded as Tether by Tether Ltd in November in the same year. Tether Ltd is the company that is responsible for maintaining a reserve of fiat currencies equal to the value of Tether currently in circulation. 

Why was USDT token created?

It was created specifically to work as a bridge between the cryptocurrencies and fiat currencies. Tether offers a stable, transparent, and nonvolatile option to hold onto cryptocurrencies to the crypto community. Tether's value is pegged to the US dollar at a 1:1 ratio. 

#2. TrueUSD (TUSD)

TrueUSD is one of the leading stablecoins currently. It is an ERC-20 coin and its value is backed by USD. It is verified by third-party attestation and thus proved its transparency to the TUSD holders and the wide crypto community. 

They have reduced the counterparty risk by holding the USD funds in multiple escrow accounts. This step also helps provide legal protection to the TUSD token holders against misappropriation of the funds. As per the TrueUSD team, they have also ensured that they undergo regular evaluations by independent third-party auditors such as Cohen & Company. 

Why was TUSD token created?

It was launched to meet the huge demand for financial-asset-backed and real-world currency-backed cryptocurrencies. They wanted to develop a trustworthy stablecoin that they would use and trust themselves. 

They have developed a framework that enables its users to transfer their USD funds with the escrow accounts directly. The TrueUSD team doesn't access these funds at any point in the exchange. Instead, a user sends and receives USD from one of TrueUSD's escrow accounts from its banking and fiduciary partner network, to redeem or purchase TUSD. 

#3. Dai (DAI)

We are mentioning Dai in this Stablecoin list as it is one of the most popular stablecoins in the market currently. Unlike other popular stablecoins like USDT & TUSD which are backed by a reserve of fiat currencies like the USD, the Euro, and the Japanese yen, Dai is backed by crypto collaterals. Dai's crypto collateral is also available to be viewed by the public on the Ethereum blockchain. 

Dai is created by MakerDAO via its Makers Dai Stablecoin System. It preserves its value against the leading fiat currencies through margin trading. Margin trading helps Dai in its response to the ever-changing market conditions which also affects the prices of real-world currencies. Dai is a favorite stablecoin of many crypto users and is one of the most popular coins in this stablecoin list. 

Why was DAI token created?

Some of the leading stablecoins like Tether and Libra were being monitored by financial regulators globally, as back then, there were concerns about how these companies manage their reserves. At that time, MakerDAO came up with Dai stablecoin in 2017 to alleviate such suspicions. 

MakerDAO locked up Ethereum coins that backed the value of Dai stablecoins in algorithm-run blockchain contracts. Maker's supporters say that this step ensures that Dai's value will remain stable and the transactions will be processed instantly. It also helps Dai in avoiding governance risks. 

#4. USD Coin (USDC)

The USD Coin was launched by Coinbase and Circle, two of the largest brands from the crypto industry. USDC is a stablecoin whose value is pegged to the US dollar. 

Both Coinbase and Circle integrated USDC into their product lines. The USD Coin was integrated into Circle Pay, Circle Invest, Poloniex trading platform, and Circle's own equity crowdfunding platform known as SeedInvest. 

On the other hand, Coinbase has allowed USDC on its platform and enabled users to transfer currency across borders with zero fees. Coinbase also came out with a crypto-backed debit card known as a Coinbase card to grow its user base. 

Why was USDC token created?

Circle came out with USD Coin to relieve the fears about stablecoins. The fears exacerbated after the news about the non-transparent ties between Tether and Bitfinex spread. It led to speculation that this would turn into one of the biggest scandals in the history of the crypto industry. Coinbase also joined to support USDC through the consortium to support the growth of the USDC. Both Coinbase and Circle believe that a centralized stablecoin is the best option to comply with regulatory requirements. 

#5. HUSD

Huobi along with its partners Paxos Trust Company and Stable Universal launched HUSD Token on July 22nd. HUSD is the first stablecoin to be listed and integrated fully with Huobi Global. Just like its peer fiat-backed stablecoins, HUSD Token is also pegged to the USD at a 1:1 ratio. 

The HUSD Token will comply with all regulatory requirements as all dollars backing the value of HUSD Token is held by the Paxos Trust Company in a reserve. Paxos Trust Company is registered under the New York State Department of Financial Service to provide fiduciary and custodian services. This means that HUSD Token will fulfill all regulatory obligations that a Stablecoin must comply with currently. 

Why was HUSD token created?

HUSD Token was created by Huobi, Paxos Trust, and Stable Universal to offer a stablecoin that offers multiple benefits to crypto users like safety, reliability, and security.  

#6. Pax Gold (PAXG)

Pax Gold is an asset-backed stablecoin and it was launched in September 2019. It was launched by Paxos, a fintech company. Pax Gold allows users to avail of the double benefits of owning gold as well as a digital token. It finds a name in our stablecoin list as PAXG is one of the top-most and popular asset-backed stablecoins in the market currently. 

The value of PAXG is backed by professional gold vaults based in London. This means that a user can redeem the PAXG tokens for physical gold accredited by LBMA. PAXG allows users to own gold without actually holding any of it physically. Firms such as Deloitte and Grant Thornton conduct internal audit operations of Paxos on an annual basis. It assures investors that their investment will remain safe if they opt to purchase Pax Gold. 

Why was PAXG token Created?

The founders of Paxos launched PAXG as they wanted to remove the barriers that discouraged investors from investing in gold.

This article was created by YouHodler. We provide both crypto lending and crypto saving functionality. Check out how you can access crypto loans with the highest loan-to-value ratio of up to 90%. Furthermore, we offer crypto savings where you can earn up to 12% a year on assets such as Bitcoin, USDC, True USD, and many more. Discover the options!

About the Author
Contributor

Michiel Mulders is a blockchain developer with a passion for the crypto space. His interests include blockchain, entrepreneurship, marketing, and carefully crafted beers. Cheers!

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