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Top Stablecoins of 2024

게시: Oct 4, 2024
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Learn about the top stablecoins of 2024, how they work, current news developments and how to buy stablecoins with Trust Wallet.

Top Stablecoins of 2024

A stablecoin is a type of cryptocurrency that maintains a stable value as it is pegged to a commodity or fiat currency, like the U.S. Dollar. The primary purpose of stablecoins is to address the price volatility commonly associated with cryptocurrencies like Bitcoin. Stablecoins enable users to conduct transactions without worrying about drastic price fluctuations and allow for the storage of value in a more stable asset.

Stablecoins serve multiple functions in the cryptocurrency ecosystem, including acting as a medium of exchange, providing liquidity for trading pairs, and facilitating cross-border payments without the need for traditional financial intermediaries. They can be stored, sent, received, and swapped using Trust Wallet. In this article, we will explore how to buy stablecoins and learn who the current market leaders are.

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Before You Get Started

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Top Stablecoins in 2024

The top stablecoins currently recognized for their unique characteristics and market presence are:

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What is Tether?

Tether (USDT) is a fiat-collateralized stablecoin that aims to maintain a 1:1 peg with the U.S. Dollar. Launched in 2014, it has become the largest, most widely used stablecoin in the cryptocurrency market, bridging traditional fiat currencies and blockchain assets.

How does Tether work?

Each USDT token is backed by reserves of U.S. Dollars or equivalent assets held by Tether Limited. The company claims that, for every USDT issued, the same amount of fiat currency is held in reserve. Tether operates on multiple blockchains, including Ethereum, Tron, and Solana, enabling users to transact seamlessly across various platforms. To ensure transparency, Tether publishes regular reports on its reserves.

Pros and Cons of USDT

Pros:

Cons:

What Makes USDT Unique?

Tether's first-mover advantage and extensive adoption across the cryptocurrency ecosystem set it apart from other stablecoins. Tether’s significant market share and liquidity make it a critical component for traders looking to hedge against volatility.

Recent News:

Tether's market share has surged to approximately 75% of the total Stablecoin market, with its market cap reaching $118 billion. This growth reflects increased demand for USDT amid challenges faced by competitors, like USDC and BUSD, which have seen declines in their market capitalizations owing to regulatory issues and a loss of user confidence.

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What is USD Coin (USDC)?

USD Coin (USDC) is a fully collateralized Stablecoin launched in 2018 by the CENTRE consortium, which includes Circle and Coinbase. It is pegged to the U.S. Dollar at a 1:1 ratio, providing a secure digital currency option for users.

How Does USDC Work?

USDC is backed by U.S. Dollar reserves held in regulated financial institutions. The reserves are regularly audited by independent firms to ensure that each USDC token in circulation is fully backed by an equivalent Dollar. Users can easily send and receive USDC through various exchanges and wallets.

Pros and Cons of USDC

Pros:

Cons:

What Makes USDC Unique?

USDC's commitment to regulatory compliance and transparency through regular audits enhances its credibility among users. Its integration into various DeFi platforms also enables users to leverage their holdings for yield generation.

Recent News:

USDC has been recovering from setbacks experienced during the U.S. regional banking crisis in March 2023, where one of its reserve partners collapsed. Although its market cap fell from $50 billion, to around $35 billion during this period, USDC has regained stability and continues to be adopted by users seeking a reliable Stablecoin option.

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What Dai (DAI)?

Dai (DAI) is a decentralized Stablecoin created by MakerDAO that maintains a soft peg to the U.S. Dollar. Dai is collateralized by various cryptocurrencies deposited into smart contracts on the Ethereum blockchain.

How Does DAI Work?

Users can generate Dai by locking up Ethereum or other approved cryptocurrencies as collateral in Maker Vaults within the MakerDAO system. The system uses an algorithm to maintain Dai's peg through over-collateralization and stability fees. If the value of collateral falls below a certain threshold, users risk liquidation of their assets.

Pros and Cons of DAI

Pros:

Cons:

What Makes DAI Unique?

Dai's decentralized nature and reliance on cryptocurrency collateral distinguish it from other Stablecoins. Dai’s innovative approach enables users to engage with DeFi while maintaining price stability through smart contracts.

Recent News:

Dai has seen increased adoption within DeFi ecosystems, thanks to its unique structure that enables users to participate in lending and borrowing without relying on traditional banking systems. Reports indicate that Dai's usage has surged as more users seek decentralized alternatives amidst regulatory pressures on centralized Stablecoins like USDC and BUSD.

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What is First Digital USD (FDUSD)?

First Digital USD (FDUSD) is a reserve-backed Stablecoin introduced in June 2023. FDUSD maintains a 1:1 peg with the U.S. Dollar, providing a stable digital currency option that enables efficient financial transactions within the cryptocurrency ecosystem. FDUSD is issued by First Digital Group, a registered trust company based in Hong Kong.

How Does FDUSD Work?

FDUSD operates on the Ethereum and BNB Chain networks, adhering to ERC-20 and BEP-20 token standards. FDUSD’s reserves, which include low-risk assets such as U.S. Treasury bills and cash equivalents, are held in segregated accounts by First Digital Trust Ltd. This structure ensures that FDUSD remains fully backed by its reserves, enabling users to redeem their tokens for U.S. Dollars at any time. FDUSD's programmability supports integration with smart contracts, enabling various decentralized finance (DeFi) applications like yield farming, lending, and staking.

Pros and Cons of FDUSD

Pros:

Cons:

What Makes FDUSD Unique?

FDUSD stands out owing to its strong regulatory compliance under Hong Kong's Trust Ordinance and its transparent reserve management practices. The backing by high-quality assets and the commitment to maintaining a 1:1 peg with the U.S. Dollar enhances its credibility in the market. FDUSD's programmability enables it to integrate seamlessly into various DeFi platforms, making it versatile for users seeking both stability and functionality.

Recent News:

FDUSD has rapidly ascended, to become the fourth-largest Stablecoin by market capitalization, reaching approximately $2.6 billion. This growth can be attributed to its transparent reserve management and strategic expansion across multiple blockchain networks. FDUSD gained traction following Binance’s pivot from BUSD to FDUSD after regulatory concerns surrounding BUSD emerged. This shift has significantly increased FDUSD's market presence and user adoption in the competitive stablecoin landscape.

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What is Ethena USDe (USDe)?

Ethena USDe (USDe) is a synthetic Dollar Stablecoin developed by Ethena Labs, designed to innovate within the decentralized finance (DeFi) space. USDe aims to provide a scalable and censorship-resistant alternative to traditional stablecoins by leveraging Ethereum as its underlying asset.

How Does USDe Work?

USDe maintains its peg through a combination of delta hedging strategies and a mint-and-redeem mechanism. Users can mint USDe by depositing Ethereum or liquid staking tokens as collateral while shorting perpetual futures on centralized exchanges. This delta-neutral strategy ensures that fluctuations in collateral value do not affect USDe's stability. USDe generates yield through participation in derivatives markets and staking rewards from Ethereum.

Pros and Cons of USDe

Pros:

Cons:

What Makes USDe Unique?

USDe is unique owing to its innovative approach of combining yield generation with synthetic Dollar functionality. Using delta hedging strategies and offering a new financial instrument called the "Internet Bond," Ethena aims to democratize investment opportunities while providing a stable medium of exchange.

Recent News:

Ethena USDe has been recognized as the fastest-growing Dollar-denominated asset in crypto history, achieving a market cap milestone of $2 billion within just four months of launch. The synthetic Dollar has generated significant interest as it has high yield potential, reaching annual yields as high as 113% earlier this year before stabilizing around 12%. This rapid growth has raised concerns about sustainability and market risks associated with its yield generation mechanisms.

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How to Buy Stablecoins Using Trust Wallet

You can buy crypto, including stablecoins, using Trust Wallet, via our trusted partners. In this example we have used Tether (USDT) Here’s how to buy stablecoins:

If using the mobile app:

If using the browser extension:

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Stablecoins provide a bridge between the volatility of traditional cryptocurrencies and the stability of fiat currencies. Stablecoins enable various applications, from facilitating everyday transactions to serving as a reliable medium for trading and investment. As Stablecoins continue to grow in popularity, they play an increasingly important role in the efficiency of financial services and promoting broader adoption of digital assets.

The rapid expansion of Stablecoins has not come without challenges. Issues like regulatory scrutiny, transparency concerns regarding reserve backing, and the risk of depegging, have highlighted the need for robust oversight.

The future of Stablecoins will depend on their ability to adapt to regulatory environments and market demands. As more users seek stability in their digital transactions, the importance of transparent governance and sound financial practices will become paramount. With ongoing developments in regulation and technology, Stablecoins are poised to play an important role in shaping the future of finance, offering a blend of security, efficiency, and accessibility.

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Note: Any cited numbers, figures, or illustrations are reported at the time of writing, and are subject to change.