Cryptomeria Capital Unveils a Thorough Examination of Stablecoins
Though stablecoins first appeared in 2014, their significant adoption only took off with the USDT boom in 2017. Within the larger cryptocurrency narrative, stablecoins remain a relatively nascent innovation, still navigating through phases of testing and refinement.
For those who are still on the fence about what stablecoins actually are and their practical applications, Cryptomeria Capital has collaborated with Axon to launch an insightful resource. in-depth research This report, titled “Stablecoins: Current Status and Outlook,” serves as a guide to all the various stablecoins available, catering to anyone curious about these digital tokens.
Stablecoins are generally classified into three primary categories: traditional asset-backed stablecoins, crypto-backed stablecoins, and algorithmic stablecoins.
- Among these, asset-backed stablecoins are the most prevalent, with notable examples including USDT, EURt, USDC, and BUSD.
- Crypto-backed stablecoins operate similarly, using overcollateralized cryptocurrencies instead of fiat currencies to cushion against sudden price fluctuations in the market.
- Algorithmic stablecoins represent a unique category that relies on smart contracts and programmed algorithms on the blockchain to maintain their valued peg to the U.S. dollar. These algorithms actively work to stabilize token prices by responding to set expiration dates.
- A new wave of stablecoins has emerged that fuses various attributes of existing types. Fractional algorithmic stablecoins, for instance, employ both collateral and algorithmic mechanisms for greater price stability. Prominent examples of these include FRAX and USDD.
Navigating the different types of stablecoins and comprehending their collateral structures can be complex due to the absence of a consolidated resource clarifying these distinctions. That’s where Cryptomeria’s report serves its purpose. By delivering an in-depth assessment of stablecoins and their features, it aims to empower readers with the insights needed to traverse this intricate space and make educated choices in this dynamic market.
Cryptomeria pointed out, “Last year, stablecoins went through significant fluctuations that stirred emotions ranging from panic to excitement among holders. Hence, we deemed it essential to portray the current landscape of the industry,” tweet .
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