Stablecoins are a type of cryptocurrency designed to maintain a stable value, typically pegged to a fiat currency like the US dollar. Over the years, the number and variety of stablecoins have exploded, becoming a crucial part of the crypto ecosystem. The following is a detailed A-Z guide based on an exhaustive list of stablecoins, covering both established and emerging projects.
B is for Basis
Basis, formerly known as Basecoin, was one of the most anticipated stablecoins. It uses an algorithmic mechanism to adjust its supply in response to demand: when demand rises, new Basis tokens are minted; when demand falls, tokens are bought back and burned. This mechanism aims to automatically maintain its $1 peg without the need for collateral. It attracted significant investment from prominent venture capital firms. However, the project eventually faced regulatory challenges and was shut down, making it a cautionary tale about the complexities of algorithmic stablecoins.
B is for Bitusd
Bitusd is an older stablecoin native to the Bitshares decentralized exchange. Over time, it has drifted significantly from its intended $1 peg, now maintaining only a vague resemblance to a stablecoin. Its decline highlights the difficulty of maintaining a peg without robust collateral or algorithmic support.
C is for Carbon
Carbon also relies on an algorithmic supply adjustment to maintain parity with the US dollar, similar to Basis. Whether it will succeed in practice remains to be seen, as the project is still in its early stages.
C is for CK USD
CK USD is a mysterious stablecoin with little public information about its team or operations. Despite lacking clear supply data, it once reported a staggering 24-hour trading volume of $137 million on exchanges like BCEX and Allcoin, suggesting a degree of market traction despite its opacity.
D is for Dai
Dai, created by MakerDAO, is a collateral-backed stablecoin on Ethereum. Users generate Dai by locking up Ethereum-based assets in smart contracts, overcollateralizing to absorb price volatility. While its market cap is only about one-twentieth of Tether’s, Dai excels in transparency and decentralization. However, concerns exist about its ability to maintain the peg during extreme market volatility if collateral values drop sharply. So far, Dai has performed reliably.
H is for Havven
Havven (later rebranded as Synthetix) issued two stablecoins: nUSD (pegged to USD) and eUSD (pegged to EUR). These tokens are primarily designed for use within the Havven ecosystem for fees and settlement. An EOS version of nUSD was also planned. Despite their utility, they are unlikely to replace Tether in mainstream trading.
K is for Kowala
Kowala (KUSD) was a highly anticipated stablecoin before its launch, designed to maintain its peg through a dynamic supply algorithm similar to Basis. The project’s success hinged on its ability to cling to the US dollar through market fluctuations.
N is for Nubits
Nubits serves as a cautionary example of a failed stablecoin. Once trading near $1, it collapsed to around $0.15 on exchanges like Upbit and Bittrex. Its failure illustrates the risks inherent in algorithmic stablecoins without sufficient collateral or robust mechanisms.
R is for Rockz
Rockz touts itself as 'the world's most bulletproof cryptocurrency.' It is a Swiss stablecoin pegged to the Swiss franc, launched through an ICO. If it can maintain its peg, it will fulfill its promise as a stable store of value.
S is for Stably
Stably raised $500,000 in early 2018 ahead of its launch on Ethereum and Stellar blockchains. Each Stably coin is fully backed by US dollar reserves held in escrow, similar to Tether but with greater transparency.
S is for Steem Dollars
Steem Dollars (SBD), created by Dan Larimer, initially aimed to be a stablecoin pegged to the US dollar. However, after Larimer left the project, SBD's peg weakened significantly. It now resembles what some call a 'fablecoin' – a token whose peg is more fiction than reality.
T is for Tether
Tether (USDT) is the dominant stablecoin by market cap, at one point exceeding $2.8 billion. It operates on Omni Layer and as an ERC-20 token, purportedly backed by US dollar deposits. Despite controversy over its lack of a full audit, Tether maintains a relatively stable peg, largely due to market belief and its widespread use on exchanges. It remains the 'too big to fail' of stablecoins.
T is for TrueUSD
TrueUSD was issued by TrustToken, backed by US dollars held in escrow accounts with regular attestations. It offers greater transparency than Tether and gained adoption on major exchanges like Binance, Bittrex, and Zebpay, making it a rising star.
U is for USD-C
USD-C was a stablecoin project by Circle, intended to launch on Poloniex. It was to be an ERC-20 token pegged to the US dollar, backed by reserves. The project aimed to combine transparency with regulatory compliance.
U is for USDVault
USDVault claimed to be backed by gold bullion stored in Swiss vaults, with each token representing one US dollar worth of gold. This asset-backed approach aimed to provide a physical backing to the digital stablecoin.
In summary, stablecoins come in various flavors – algorithmic, collateral-backed, and fiat-backed. While some have succeeded in maintaining their pegs, others have failed or drifted. The crypto market continues to rely on stablecoins as a safe haven during volatility, but long-term sustainability remains uncertain. As the saying goes, 'Any port in a storm,' and stablecoins have indeed provided shelter for traders during turbulent times.