Stable coins are cryptocurrencies, which its values are backed by other assets such as gold or fiat currencies.
There has been more and more of these cryptos that have been appearing on the markets. These stablecoins compete directly with the first and well-known stablecoin called Tether. We will go through some of the top stablecoins in the cryptocurrency market to date.
1. Tether (USDT)
This Tether coin is the first to have reached the cryptocurrency market, after it was developed back in early 2015. Tether is backed by fiat currency at a 1:1 ratio. The stablecoin has suffered numerous controversies, however, for the past few years and has not been able to truly withstand the promises that a stablecoin should offer.
The Stablecoin is still the most widely used and supported stablecoin in the crypto market, with a current market cap of over $1,911,111,175 putting it in the 8th position on CoinMarketCap.
2. TrueUSD (TUSD)
TheTrueUSD cryptocurrency is based on the ERC-20 token algorithm from the Ethereum network. It is a stablecoin that is pegged to the US dollar, with similar functionalities to the USDT. However, the TrueUSD is completely fiat based and collateralized with legal protection and transparently verified by third-parties.
This stablecoin is said to be managed and supported by former employees of Google, PwC and UC Berkeley. The company has plans on tokenizing other real-world assets and making them represent the TrueUSD brand, like TrueYen, TrueBond, and TrueEuro to bring more stability to the fluctuating cryptocurrency market.
3. MakerDAO (DAI)
The MakerDAO cryptocurrency is a decentralized autonomous organization that intends to create a new breed of stablecoins. It had its initiation back in 2017, which was a proposed solution to the Tether stablecoin. The coin is back by Ethereum and not by a fiat currency, these stablecoins are known as crypto-collateralized coins. However, most individuals find the model difficult to understand and makes investors hesitant, as the model has not yet been properly trialed.
4. USD Coin(USDC)
This stablecoin is backed by Circle and Coinbase, which is a stablecoin that has succeeded in quickly establishing itself on the market due to its corporate backers. The stablecoin currently has important partnerships with prominent crypto institutions and exchanges like Kyber,Trust wallet, OKEx, Ledger and DigiFinex.
This stablecoin is also based on the Ethereum ERC-20 token protocol, this also gives it access and benefits to the tremendous popularity and strong user base of Ethereum. The coin entered in the top 30 best coins by market cap within 2 months after its launch. This makes it one of the fastest growing coins ever to be released as well as the fastest stablecoin.
The USD coins are held by reserves by the regulated and licensed financial institutions, that have an obligation to deliver reports of its USD reserve holdings.
5. Gemini Dollar (GUSD)
The Gemini Dollar stablecoin has been in development for quite some time, as the coin was created by the Winklevoss twins. They are well-known bitcoin investors and owners of the Gemini exchange. The coin was launched just under three months ago and it has already been listed on more than 19 different exchanges. It is also currently at the 50th position on the MarketCap.
The stablecoin has great potential because of its famous founder's and its legal compliance with several different standards.
6. Huobi (HUSD)
The Huobi is different from other stablecoins on the list as it can only be utilized within the limits of the Huobi exchange. The coins serve as an exchange base for the pairing and representation of 4 stablecoins, which are currently supported by TUSD, USDC, GUSD, and PAX.
If any of these stablecoins are deposited into the Huobi trading account, it will be automatically converted to the HUSD coin and can be traded against any other HUSD pairs.
When cashing out the trader must first choose the stablecoin they want to cash out into and the conversion is then executed without the need for any fees. The stabecoins use is currently limited to the Huobi exchange, but the company has plans to make it available for use outside the platform in the near future.
7. NuBits (USNBT)
NuBits is one of the first stablecoins that has gained widespread circulation but has suffered from not having proper collateral management. This has caused the coin to be unstable on the market. The NuBits coin uses a proof-of-work algorithm, this means it has a proprietary Blockchain and is backed by asset managers that have purchased and sold capital based on its issuance.
The coin suffered a sharp drop of 80% in the span of 3 weeks. This made it also difficult to maintain the price of the coin equal to the dollar. After 3 months it succeeded in re-stabilizing its collateralized value. It is currently trading below the $1 amount and will have to build back up to gain the normal pegged amount at $1 per NuBits.
These were the stablecoins that can currently be found on the cryptocurrency market, and many have the potential of becoming serious rivals of the original Tether coin. The market expects more stablecoins to immerse in the future learning from past errors and failers. However, the market is more focused on the potential of cryptocurrencies that flow with the market of demand and supply.