Alyze Sam, Adam Alonzi, Patrick Devereux and Koosha Azim term themselves themselves ‘the Stablecoin Group’ as they collectively try to be the unbiased go-to for Stablecoin knowledge, with the help of their communities. Alyze Sam's book, ‘Stablecoin Economy’ was released May 14, 2020. This article is a section from my book that breaks down the top ten stablecoins. Please enjoy this free chapter and consider supporting my work, as I produce a stablecoin to reward children for altruism. Thank you!
1. Tether (USDT)
Tether is a controversial cryptocurrency. Launched as RealCoin in July 2014, it was rebranded as Tether in November by Tether Ltd., the company that is responsible for maintaining its fiat reserves. It started trading on exchanges in February 2015.
The cryptocurrency is backed by an equivalent amount of traditional fiat currencies, like the US Dollar, Euro, or the Yen, which are held in a designated bank account. Tether was the first Stablecoin to be listed on exchanges in 2015, it’s since become one of the most traded assets on the market.
Tether is a fast and efficient way to transfer value from one exchange to another without the need for using a more volatile digital asset. The convenience of Tether, as well as the fact that Tether was a substitute for the US dollar, both appealed to stock magnates and everyday traders.
Tether falls under the Stablecoin category because it was originally designed to keep $1.00 in reserves for each Tether issued. Nevertheless, Tether Limited states the owners of Tether tokens have no contractual obligation to guarantee that Tether coins can be redeemed or exchanged for fiat. On 30 April 2019, Tether Limited’s lawyer claimed that each Tether was backed by only $0.74 in cash and cash equivalents.
Tether Limited and Tether are controversial related to the company’s failure to provide a promised audit showing adequate reserves, alleged role in manipulating the price of Bitcoin, their unclear relationship with the Bitfinex exchange, and apparent lack of a long-term banking relationship.
Author David Gerard was quoted by the Wall Street Journal saying Tether “is sort of the central bank of crypto trading … [yet] they don’t conduct themselves like you’d expect a responsible, sensible financial institution to do.”
Tether’s price decreased to $0.90 on 15 October 2018 on speculation that investors were losing faith in the token. On 20 November 2018, Bloomberg reported that U.S. federal prosecutors were investigating whether Tether was used to manipulate the price of Bitcoin. In 2019 Tether surpassed Bitcoin in trading volume with the highest daily and monthly trading volume of any cryptocurrency on the market.
USDT formerly claimed that each token was backed by one United States dollar, but on 14 March 2019 changed the backing to include loans to affiliate companies.
In early 2017, USDT authors began to “print money” as traditional banks in the US and other countries do. At first, they stated that they would not increase the supply of their Stablecoin. But then they did the opposite, allegedly minting new Tether for the sake of increasing the price of Bitcoin in mid-2017.
Only after a significant number of fraud allegations hit Tether in 2018, the price of the asset fell from $1 per token to 85 cents.
The Bitfinex exchange was accused by the New York Attorney General of using Tether’s funds to cover up $850 million in funds missing since mid-2018. It failed because Tether dramatically increased the number of tokens in the circulation, making it unsteady until the market capitalization reached billions of dollars. Initially Tether had only a couple of tens of millions. Tether became a Stablecoin market monopolist and started releasing USDT coins without retaining an equivalent USD backing.
In November 2017, it was allegedly hacked. 31 million dollars worth of Tether coins were stolen, prompting a hard fork.
In January 2018, it hit another hurdle as the necessary audit never took place. Instead, it announced it was parting ways with the audit firm, after which it was issued a subpoena by regulators. Worries about whether the company, accused of a lack of transparency, has enough in reserves to back the coin have been pervasive.
In April 2019, New York Attorney General Letitia James accused iFinex Inc., the parent company of Tether Ltd. and operator of cryptocurrency exchange Bitfinex, of hiding a loss of $850 million dollars of commingled client and corporate funds from investors. Court filings say these funds were given to a Panamanian entity called Crypto Capital Corp. without a contract or agreement, to handle withdrawal requests.
Bitfinex allegedly took at least $700 million from Tether’s cash reserves to hide the gap after the money went missing. In a statement, the companies said the filings “were written in bad faith and are riddled with false assertions.”
“On the contrary, we have been informed that these Crypto Capital amounts are not lost but have been, in fact, seized and safeguarded. We are and have been actively working to exercise our rights and remedies and get those funds released. Sadly, the New York Attorney General’s office seems to be intent on undermining those efforts to the detriment of our customers.”
According to the Wall Street Journal, about 80% of all BTC trading is done with the help of USDT, ensuring liquidity on the crypto market.
Market cap: $4,637,770,806
Circulating supply: 4,642,367,414 USDT
Historical price fluctuations: $0.84 — $1.21
Stabilization: Each USDT Collateralized token has a corresponding $1 United States Dollar (USD) invested in an owned account.
TUSD was the first regulated Stablecoin fully backed by the US Dollar. TrueUSD claims they “are a financial technology company committed to creating and improving the standard of stable assets.” Further stating, “United Trust is building a financial ecosystem that encompasses the benefits of traditional fiat-backed stablecoins, but with decentralization in purest form. This ecosystem will allow institutions and businesses to seamlessly manage and trade their assets.”
As of April 2020, TrueUSD was 100% secured by US dollars on legally protected escrow accounts with several partners of the bank bringing security and efficiency to sending and receiving payments. The first independent audit was conducted on March 1, 2018 and proved that almost $ 1.8 million is backing up TrustToken reserves.
“A true token only becomes a currency once it’s used by markets as a store of value and means of exchange. TrustUSD is a stable asset protected against inflation and market volatility while also serving the world’s underbanked.” Tether claims they are “money built for the internet” and “Whatever you can do with digital currencies, you can now do with digital cash.”
Buyers pass the KYC and AML check and send USD to the trust company with an escrow agreement. When they check your funds, their API instructs our smart contract to issue the equivalent TrueUSD to your Ethereum public address.
To redeem the US dollar, you transfer the KYC / AML check, send a smart contract with your TrueUSD tokens from the Ethereum registered address, and then the escrow bank will send you the funds. Your property on the account is legally recognized, and every 1 TrueUSD token you receive reminds of a redeemable certificate of ownership for $1.00 through escrow.
According to TrueUSD
“TrustUSD is a protocol of money that ensures price-stability by algorithmically expanding and contracting supply. Our protocol is targeting mass adoption on a global scale and powering the next generation of decentralized applications on multiple blockchains.”
“Decentralized stable assets are very important to the future of cryptocurrencies. Cryptocurrencies have the potential to transform the financial landscape. Yet, price volatility remains a major barrier for mass adoption. Our answer is TrustUSD, a fully decentralized independent money protocol to become a new global currency.
A cryptocurrency that has no clear purpose to be used in lieu of a traditional fiat currency is essentially useless.
TrustUSD has a vision to partner with major commerce systems and be utilized as a viable medium of exchange across the world. The protocol mechanism is actually quite simple: when token price exceeds $1 price target, the protocol will expand the total supply until price levels have reached a state of equilibrium. If the token price falls below $1, the protocol will contract the total supply until the price reaches the $1 target once again.”
“A protocol such as TrustUSD is simple, yet very effective. Many stable assets incorporate very complex systems that aren’t very effective because simple economic principles are the most valuable information a project of this magnitude could hold. Along with that, many cryptocurrency investors want to see stable assets that are truly free from corruption and market manipulation, and we’ve brought a solution to those concerns.”
Market cap: $142,264,155
Circulating supply: 142,451,763 TUSD
Historical price fluctuations: $0.934 — $1.36
Stabilization: Every TUSD token is backed by $1 United States Dollar (USD) held in an escrow account by third parties.
MakerDAI allows users to take full advantage of cryptocurrency investing without worrying about market volatility. There are numerous strategies in play to keep Dai stable. The white paper displays well-thought-out reactions to potential problems the system may encounter, along with steps to mitigate the risk.
To understand DAI one must be introduced to MakerDAO, an open-source project on the Ethereum blockchain and a Decentralized Autonomous Organization created in 2014. Maker works to minimize the volatility of DAI, its stable token, compared to the U.S. dollar, with holders of MKR tokens governing DAI. Through a system of scientific governance involving Executive Voting and Governance Polling, MKR holders manage the Maker Protocol and the financial risks of Dai to ensure its stability, transparency, and efficiency. MKR voting weight is proportional to the amount of MKR a voter stakes in the voting contract, DSChief.
DAI promises to be “The world’s first unbiased currency. Dai is a stable, decentralized currency that does not discriminate. Any business or individual can realize the advantages of digital money.” MakerDAI continues, “Financial freedom with no volatility. A price-stable currency that you control. Generate Dai on your terms, instantly. Secure your Dai and start to earn the Dai Savings Rate set by the Maker community.”
“The Maker Protocol, built on the Ethereum blockchain, enables users to create currency. Current elements of the Maker Protocol are the Dai stablecoin, Maker Collateral Vaults, Oracles, and Voting. MakerDAO governs the Maker Protocol by deciding on key parameters (e.g., stability fees, collateral types/rates, etc.) through the voting power of MKR holders. The Maker Protocol, one of the largest decentralized applications (DApps) on the Ethereum blockchain, was the first decentralized finance (DeFi) application to earn significant adoption.” Source
There are several foundations to the MakerDAI protocol including:
The Maker Foundation
“The Maker Foundation, which is part of the global Maker community, built and launched the Maker Protocol in conjunction with a number of outside partners. It is currently working with the MakerDAO community to bootstrap decentralized governance of the project and drive it toward complete decentralization.”
The DAI Foundation
“The Dai Foundation, based in Denmark, is self-governing and independent of the Maker Foundation. It was formed to house the Maker community’s key intangible assets, such as trademarks and code copyrights, and it operates solely on the basis of objective and rigid statutes that define its mandate. Its purpose, as noted in the Dai Foundation Trust Deed, is to safeguard what cannot be technologically decentralized in the Maker Protocol.”
The collateral types that MKR voters can select to evaluate first are found at blog.makerdao.com.
“The flexibility of the Maker Protocol means that almost any kind of asset that can be tokenized can be made available as collateral in the system, as long as it has appropriate risk parameters. To ensure that the system is capable of supporting a wide range of asset types, the Maker Foundation built within it a series of ‘connectors’ to allow for real-world collateral testing and auditing of MCD.
The first collateral types to be tested were chosen by the Maker Foundation based on diversity, an average daily volume of several million USD, and the relative stability of each token.”
With DAI, the team at MKR hopes to overcome the sometimes violent price swings associated with cryptocurrency. In their whitepaper the team cites examples like Bitcoin falling 25 percent in one day or rising more than 300 percent in one month. The team at Maker DAO feels that stable digital assets are needed for blockchain technology to reach its full potential. For this reason, they introduced DAI, which is backed by collateral.
Although the price of DAI Stablecoin also equals $1.00, DAI is backed by Ethereum-based smart contracts with redundancy. Dai is stabilized by external market factors such as collateralized debt positions (CDPs), autonomous response mechanisms, and external economic incentives. DAI is more decentralized because only users can create and destroy the token. DAI tokens appear only after the deposit has been paid and disappear after the debt has been paid.
Issued on the MakerDAO platform, DAI is more transparent and fair as evidenced by all operations run by smart contracts. It is currently the 60th cryptocurrency by market cap, DAI is a good fit for betting, financial markets, international trading, and transparent auditing. It should be noted that Maker also gives users the chance to choose the ecosystem’s collateral types.
Market cap: $117,349,145
Circulating supply: 116,680,177 DAI
Historical price fluctuations: $0.72 — $1.37
Stabilization: For the generation of DAI tokens, users need to purchase and stake an equal value (in United States Dollar, USD) of Ethereum, or ETH tokens. When the cost of DAI rises, users will be incentivized to create more. If the price falls, users will be incentivized to sell their DAI back to the pool.
The United States Dollar Coin or USDC, was launched in September 2016 and quickly gained ground as one of the more influential fiat pegged stable tokens. One year later USDC reached a total supply of 421,469,737 coins, becoming the second largest fiat pegged asset behind Tether (USDT). The minting of USDC is controlled and reflects real-world fund inflows. USDC has continued growing despite the occasional token burn, as the asset works like a fiat off-ramp in crypto trading, as many Stablecoins aim to accomplish.
“USDC has established itself as the second most popular Stablecoin in the world; it has unparalleled support from more than 100 companies across the global crypto ecosystem, and it’s the first Stablecoin to reach $1 billion in issuance in less than a year,” stated the CENTRE Consortium.
USD Coin is the Stablecoin crypto created by Coinbase exchange and Circle company. It’s positioned as a Stablecoin with financial and operational transparency. The exchange of cryptocurrency for fiat is carried out in the Circle USDC application which emits cryptocurrency. All services offered are available in the application: conversion, money transfers, and more.
Circle launched its own US dollar Stablecoin, called USD Coin (USDC). The $3 billion fintech startup has made a series of deals and announcements in a long-term bet that, despite the bear market, the crypto economy will persevere.
Circle’s USDC is meant to represent a single U.S. dollar. It is a 1: 1 representation of the greenback on the Ethereum (ETH) blockchain. Circle emphasizes that each USD Coin is collateralized by a corresponding US dollar, which are held in accounts subject to regular audits and public reporting.
“As more goods and services are tokenized, smart contract platforms will become fundamental building blocks of value exchange. CENTRE’s open-source and transparent Stablecoin framework allows fiat to interact with smart contracts, giving developers a viable way to use real world currencies in blockchain applications.”
Circle cofounders Jeremy Allaire and Sean Neville stated, “Coinbase and Circle share a common vision of an open global financial system built on crypto rails and blockchain infrastructure, and realizing this vision requires industry leaders to collaborate to build interoperable protocols and standards.”
When launching, commentators questioned the financial system’s openness since personal information must be provided to use USDC. Moreover, USDC is a centralized token, with KYC and AML verification. Users do not have full control of their funds, unlike Bitcoin. USDC is not a decentralized cryptocurrency, it acts as digital entries on Circle’s balance sheet that can be blacklisted or frozen.
USDC on their website claims, “USD Coin (USDC) is a type of cryptocurrency that is referred to as a Stablecoin. You can always redeem 1 USD Coin for US $1.00, giving it a stable price. On Coinbase, eligible customers can earn rewards for every USD Coin they hold.”
CENTRE says the purpose for USDC is found within their mission, “Our mission is to build an open financial system for the world. As part of this mission, we want everyone to enjoy the stability of the world’s fiat currency, the US dollar. USD Coin allows unbanked and under-banked individuals in any country to hold a US dollar–backed asset with nothing more than a mobile phone.”
CENTRE is proud of its transparency, “CENTRE Stablecoins are issued by regulated and licensed financial institutions that maintain full reserves of the equivalent fiat currency. Issuers are required to regularly report their USD reserve holdings, and Grant Thornton LLP issues reports on those holdings every month.”
Coinbase and Circle agree that programmable currency is a necessity, “Being programmable unlocks a whole new world of applications and businesses: developers can create accounts to store money with one line of code; lending that is faster, cheaper, and more transparent; faster and cheaper payments, including payroll; global crowdfunding; transparent and stable donations to charity.”
The Circle, Inc. a notable fin-tech company and Coinbase joined efforts to rapidly grow the supply of USDC.
USDC started off with a supply of roughly 24 million coins and later reached a peak supply above 450 million coins. USDC now participates in 169 trading pairs fueling Binance trades as part of its basket Stablecoin market.
USDC also links both Western and Asian exchanges, being accepted by most major market operators. USDC was one of the first Stablecoins to add customer screening, or KYC, to avoid fueling terrorism financing.
USDC has a daily turnover of around $200 million, still small compared to other Stablecoins, although USDC also has the advantage of being offered to merchants through the Coinbase payment system.
This Coinbase Stablecoin can be emitted by banks. CENTRE focuses on the global market and plans to attract more international banks for that. It partners with such companies as Goldman Sachs, Bitmain, and Blockchain Capital.
In March 2020, USDC became the first Stablecoin to reach $1 billion issued in less than a year.
Market cap: $437,960,448
Circulating supply: 436,495,713 USDC
Historical price fluctuations: $0.97 — $1.11
Stabilization: Each United States Dollar Coin (USDC) token is backed by $1 United States Dollar (USD) invested in an account. Circle company ensures fluctuations.
Paxos claims they’re “The New Digital Dollar. Paxos Standard (PAX) combines US Dollar stability with the efficiency of blockchain technology.” Paxos Standard Token (PAX) is a Stablecoin developed by Paxos Trust Company, LLC. PAX price is tethered to the United States Dollar in 1: 1 proportion, it launched with approval from New York regulators, according to a press release from September 10, 2018. Source.
This backed 1: 1 Ethereum blockchain-based stable digital asset has been approved by the New York State Department of Financial Services (NYDFS), which exercises regulatory oversight over the asset’s issuance and trading.
The Paxos Trust Company team aims to combine the speed of the digital assets and security with the protections of the old school financial systems. PAX was designed specifically to provide the cryptocurrency market with stability and user confidence.
Paxos itself is a Trust company and positions itself as “a fiduciary and qualified custodian of customer funds,” claiming its token is offering “greater protections” for customer assets than its competitors.
Paxos co-founder and CEO Charles Cascarilla says the asset “improves on the utility of money” by fusing the stability and robust regulatory oversight of traditional fiat currencies with crypto’s promise to create frictionless flows of digital value.
Paxos is a ERC-20 token, meaning can be received and sent by users of an Ethereum wallet. Transactions are conducted alongside the rules of the Ethereum network and share all of its features including smart contracts for the elimination of the human errors.
The dollar deposits of the Paxos Trust are held in collateralized by U.S. government treasuries or FDIC-insured U.S. banks and are accounted for as a property of the tokens’ users. Moreover, when Paxos Standard tokens are in circulation, the corresponding dollars are held in reserve. Upon redemption for dollars, Paxos Standard tokens are immediately destroyed. Tokens are only in circulation when the corresponding dollars are in custody.
PAX retains simple integration of Paxos payments, it’s a safe and reliable instrument for transactions. Paxos also other favorable attributes including:
No transaction fees24/7 customer support Ethereum-based transactionsAttestation by Withum companyFully backed by the US dollarPAX can be used in a number of cases:Suitable for cryptocurrency traders to use during volatile periods.Has an advantage over fiat currencies in terms of cryptocurrency exchange. It is faster and cheaper to use for exchange, which is of high utility in terms of purchases that need to be performed fastCan be used as a cash component of transaction at the time outside of traditional banking hours
PAX was created to be an alternative to Tether (USDT). PAX is traded with other assets that are available on the site. In particular, you can use PAX to purchase or sell Bitcoin, Ethereum, Binance Coin, EOS, XRP, as well as Stellar Lumens. Being a ERC-20 token, Paxos ensures transparency. PAX has become a Top 100 in cryptocurrencies. Possibly in relation to successfully completing two audits. Specialists of Nomic Labs revealed no issues during inspection.
Market cap: $198,898,483
Circulating supply: 198,449,056 PAX
Historical price fluctuations: $0.97 — $1.10
Stabilization: Collateralized 1: 1 by the United States Dollar (USD), controlled and regulated by the NYDFS.
BitShares is an open-source, public, blockchain-based real-time financial platform. It provides a built-in decentralized asset exchange, similar to New York Stock Exchange but for cryptocurrencies and without the need to trust a central authority. It can execute trading using an international network of computers in which anyone can take part. BitShares also provides a cryptocurrency token called “BTS”, which can be transferred between accounts and is used to collect fees for network operations and as a collateral for loans.
On June 2nd 2013, Dan Larimer discovered a way of creating a fiat-to-Bitcoin exchange without fiat deposits. His solution was introducing a token that is backed by another token on the same blockchain. Dan Larimer and Charles Hoskinson, a co-founder of Ethereum, presented a business plan to Li Xiaolai, a Chinese Bitcoin entrepreneur, who agreed to fund its development. The BitShares X project received a great deal of attention in August 2013 when CoinDesk and BitcoinTalk forums published a project announcement
On July 4th 2013 Hoskinson and Larimer founded Invictus Innovations. In October 2013 they presented the concept of BitShares at the Atlanta Bitcoin Conference. The token launched in 2014 and since March 2016 the project is a part of Microsoft Azure Blockchain as a Service package. Charles Hoskinson, founder of the Bitcoin Education Project and Cardano, has since left the team.
Consensus is the mechanism where organizations decide upon unitary rational action. Consensus technology is the basis of democratic governance and the coordination of free market activity. The process of consensus decision-making allows for all participants to choose a course of action by consensus. Bitcoin was the first system to integrate a fully decentralized consensus method with peer-to-peer networks in order to more efficiently facilitate the transfer of value through electronic communication. The proof-of-work structure that secures and maintains the Bitcoin network is one way of organizing individuals who do not necessarily trust each other to act in the best interest of all participants of the network. The BitShares ecosystem employs Delegated Proof of Stake in order to find efficient solutions to distributed consensus decision making.
Distributed Autonomous Companies (DAC) run without any human involvement under the control of an incorruptible set of predefined rules. These rules are implemented as publicly auditable open source software distributed across stakeholders. One becomes a stakeholder by obtaining “stock” in the company. This stock may entitle an investor to a share of its “profits.”
The BitShares community is a global network of individuals that share the same goal of participating in various Distributed Autonomous Companies. The community mainly revolves around the BitShares Team and third parties who use Graphen, the toolkit that makes BitShares possible, to create their own Distributed Autonomous Companies. BitShares community discussions take place openly at BitSharestalk.org.
BitUSD’s value is backed by futures, fiat, gold, silver, and other assets.
BitUSD has the following advantages:It’s a relatively reliable investment tool due to the predictable price of the asset and minimal volatility;Hedging against sudden price action and sudden cryptocurrency market movements;This unit of account is different from assets with capital gains or losses.
BitShares claim they are ‘SmartCoins’. They claim “SmartCoins take the concept of a contract for difference, and make the long side fungible. For the purpose of this discussion, we will assume that the long side of the contract is BitUSD and that the backing collateral is BTS (the BitShares core asset). To achieve this SmartCoins use the following set of market rules:
Anyone with BitUSD can exit their position within 24 hours at settlement price.The least collateralized short positions are used to settle the position.The price feed is the median of many sources, updating at least once per hour.Short positions never expire, except by hitting the maintenance collateral limit, or being force-settled as the least collateralized at the time of forced settlement.In the event that the least-collateralized short position lacks enough collateral to cover at the price feed, then all BitUSD positions are automatically force settled at the price of the least collateralized short.
According to BitShares, “SmartCoins are a powerful tool for everyone from speculators and savers to traders and entrepreneurs. The BitShares platform provides a toolset with which innovators can experiment to find optimal currency solutions using free market discovery.”
Market cap: $2,066,629
Circulating supply: 2,163,170 BITUSD
Historical price fluctuations: $0.43 — $1.25
Stabilization: Collateralized 1: 1 by the United States Dollar (USD). Backed by fiat, silver, gold, and other assets.
Equilibrium EOSDT is a stablecoin designed for the future of cryptocurrency diversification. It is built on the Equilibrium framework, which leverages the EOS blockchain on Ethereum architecture, making it a more stable and practical cryptocurrency.
“The EOS blockchain is quite fast with huge network capacity and excellent potential for development,” said Alex Melikhov, CEO of Equilibrium. “Equilibrium is the framework, the technology basis, for building decentralized stablecoins. The first proof of concept was the EODST Stablecoin that we launched in April 2019. And we think it has succeeded in terms of its traction so far.”
EOSDT is the world’s first decentralized Stablecoin on the EOS blockchain, pegged to the U.S. dollar and backed by a user’s own crypto holdings.
Currently, they accept EOS and aim to create the basis for asset-backed Stablecoins across multiple blockchains that support smart contracts.
“We chose to start with the EOS blockchain and EOSIO technology because it is faster than Ethereum, has near-zero transaction fees, and boasts an infrastructure robust enough to offer a high-quality experience to lots of users at once. […] EOS is our first choice because it offers great infrastructure prospects with the implementation of cross-chain solutions and support for multiple forms of collateral for the EOSDT stablecoin.”
EOSDT token is the asset of Equilibrium smart contract platform that serves for creation of asset-backed tokens or it’s the world’s first decentralized Stablecoin on the EOS blockchain. Every EOSDT is pegged to the US dollar. Users can generate EOSDT and choose the underlying asset.
Protocol process is as follows: User generates EOSDT tokens with EOSIO technology on the basis of Equilibrium platform. Any user holding a digital asset compatible with the Equilibrium framework can leverage it to generate EOSDT Stablecoins using a self-service gateway with an intuitive user interface.The collateralization options are chosen and then implemented in the smart contract. This position holds the deposited collateral, then a user decides how much EOSDT needs to be generated . These freshly minted stablecoins are backed by deposited collateral within the position, which can be recovered by paying back the equivalent amount of EOSDT along with any accrued fees. EOSDT tokens can be used in any convenient way (for storage, crypto exchange, payments, etc). Recovered collateral can be withdrawn by the position holder. Active positions are always overcollateralized, meaning the value of the collateral exceeds the value of the generated stablecoins. The framework seeks to maintain the minimum viable ratio of collateral to loan at all times.
EOSDAQ, Newdex and DEXEOS have listed EOSDT as a Stablecoin, so its adoption is in the progress.
Market cap: $4,662,500
Circulating supply: 4,600,116 EOSDT
Historical price fluctuations: $0.91 — $1.32
Stabilization: Crypto-collateralized, or collateralized with chosen asset
The Gemini Dollar (GUSD) is the result of a collaboration between the Gemini Trust Company and the New York Trust company.
Founded in 2014, the Gemini Trust Company, LLC or Gemini, is the digital currency exchange and custodian that allows customers to buy, sell, and store digital assets. Gemini is a New York trust company that is regulated by the New York State Department of Financial Services (NYDFS).
The Winklevoss twins announced Gemini in June 2013 and developed the Gemini Trust Company in 2014. By October 25, 2015 Gemini had an official launch date. Gemini began adding to the financial services offered thereafter, including FIX and API support. On May 5, 2016 Governor Andrew Cuomo of New York State announced Gemini as the first licensed Ethereum exchange based in the United States. Additionally, in 2016, Gemini reported they would let users withdraw Ethereum Classic (ETC) from the exchange, following a hard fork in Ethereum’s code. The following month CNBC broadcasted their advancements and Gemini became international news.
According to reports by Fortune Magazine and Bloomberg News, Gemini was the first exchange to launch Bitcoin futures contracts in December 2017. Fortune Magazine reported the Chicago Board Options Exchange (CBOE) uses Gemini “as the basis for the daily settlement for the Bitcoin futures.” Bloomberg News reported Gemini began offering “Block Trading” in April 2018. Block Trading enables users to buy and sell large quantities of digital assets outside of Gemini’s continuous order books, which creates additional liquidity mechanisms when trading in greater amounts. In April 2018, it was reported by Reuters that Gemini would be utilizing NASDAQ’s SMARTS technology to monitor trades and combat fraudulent activity and price manipulation on its exchange.
On May 14, 2018, the New York Department of Financial Services announced it had approved Gemini to offer Zcash (ZEC) on their platform. The NYDFS commented that its decision was a “continuation of New York’s longstanding commitment to innovation and leadership in the marketplace.” Gemini’s CEO, Tyler Winklevoss, was quoted in the same press-release saying that Gemini “is proud to be the first licensed exchange in the world to offer Zcash trading and custody services.”
On September 10th, 2018, Bloomberg News reported that Gemini had received regulatory approval for the Gemini dollar (GUSD) from the NYDFS and would launch trading that day. On October 3rd, Gemini obtained insurance covering digital assets held on its exchange. Bloomberg Markets stated the insurance was brokered by Aon, a London based public risk consulting company, and underwritten by a consortium of global underwriters.
Gemini claims to be “The world’s first regulated Stablecoin, designed for high scale and usability in all kinds of transactions. Gemini dollar (GUSD) is purpose-built to bring the value of the U.S. dollar into the modern digital era.” Gemini was founded to facilitate the purchase and storage of Bitcoin through a complex system of private keys and password protected environments. GUSD was created as the direct competitor for the Tether cryptocurrency. Although the company was accused of non-transparent operations, according to Cameron Winklevoss, to date, none of the existing coins pegged to the dollar can be rightly called a Stablecoin.
Gemini states they’ve conquered trust with their token, “Building a viable stablecoin is as much of a trust problem as it is a computer science one. While Bitcoin created a system based on cryptographic proof instead of trust, a fiat-pegged stablecoin requires both due to its reliance on a centralized issuer. Desirable outcomes in a system that relies (at least in part) on trust requires oversight. In the context of a stablecoin, we submit that the issuer must be licensed and subject to regulatory supervision. From this, transparency and examination become requirements of the system, ensuring its integrity and 1 engendering market confidence. We propose Gemini Trust Company, LLC (Gemini), a New York trust company, as the issuer of the Gemini dollar. Gemini operates under the direct supervision and regulatory authority of the New York State Department of Financial Services and is subject to the New York Banking Law and other applicable U.S. laws and regulations. Gemini maintains the necessary licenses and registrations to lawfully issue Gemini dollars.”
From the Gemini White Paper “The Gemini dollar is a cryptographic token that is issued by a New York trust company, strictly pegged 1: 1 to the U.S. dollar, and built on the Ethereum network according to the ERC20 standard for tokens. The Gemini dollar is a stable value coin that combines the creditworthiness and price stability of the U.S. dollar with the technological advantages of a cryptocurrency and the oversight of U.S. regulators. As an ERC20 compliant token, the Gemini dollar can be transferred on the Ethereum network. Gemini dollars are created at the time of withdrawal from the Gemini platform and redeemed or “destroyed” at the time of deposit into the Gemini platform.”
Gemini dollar has several distinct advantages:The Gemini Dollar cryptocurrency is under the direct supervision of the New York State Department of Financial Services (NYDFS) and is fully subordinate to US laws and regulationsThe dollars that the coin is supported with are kept in a special bank account of the American holding company State Street Corporation, which was developed by 150 programmersThe company account is insured by the Federal Deposit Insurance Corporation (FDIC)The number of dollars in the account strictly corresponds to the number of tokens in circulation. This equality is monitored by independent audit firm BPM Accounting and Consulting
Market cap: $4,004,518
Circulating supply: 3,968,720 GUSD
Historical price fluctuations: $0.95 — $1.19
Stabilization: Collateralized 1: 1 by the United States Dollar (USD), controlled and regulated by the NYDFS
The BGBP Stablecoin was Binance’s first step towards the cryptocurrency exchange ambition to build a collection of Stablecoins pegged to different fiat currencies on the Binance blockchain.
On July 19, 2019, Binance Jersey, the fiat to cryptocurrency exchange that accepts Euros (EUR) and British Pounds (GBP) announced the listing of its GBP backed token, the Binance BGBP Stablecoin. This digital asset is pegged to the Great Britain Pound (GBP) and backed by fiat in reserve. The token is based on the Ethereum platform.
The Binance Jersey Exchange first announced that it was testing a GBP backed Stablecoin in early June 2019. Binance CEO Changpeng Zhao confirmed that only £200 worth of the stable asset had been issued. During the GBPB launch there were only two other venues that provided GBP pegged Stablecoins: the TrueGBP project and the eToro GBP Stablecoin project.
Binance says they wanted to continue offering more options in the cryptocurrency space by providing its European users with better trading experiences. Wei Zhou, CFO of Binance, said: “There has been an overwhelming demand in the market and Binance community for more Stablecoin diversification, including a GBP-pegged Stablecoin, and listing BGBP is in response to it. Use cases and the utility of Stablecoins have increased as well as BNB, which has tripled since the beginning of the year and continuing to grow rapidly with the advancement of Binance Chain.”
Binance Jersey says they provide secure and reliable trading of the Euro (EUR) and British Pound (GBP) with Bitcoin (BTC) and Ethereum (ETH), in addition to digital asset management services to users from around the world.
Binance is a blockchain ecosystem composed of several arms to serve the greater mission of blockchain advancement and the freedom of money.
The Binance Exchange is the leading global cryptocurrency exchange by trading volume, with users from over 180 countries. Capable of processing more than 1.4 million orders per second, Binance is one of the fastest cryptocurrency trading platforms in the world. The platform focuses on security, robustness and execution speed.
The Binance ecosystem is also comprised of Binance Labs, the venture capital arm and incubator; Binance DEX, its decentralized exchange feature developed on top of its native, community-driven blockchain software system, Binance Chain; Binance Launchpad, the token sale platform; Binance Academy, it’s educational portal; Binance Research, the market analysis; Binance Charity Foundation, the blockchain powered donation platform and nonprofit for aiding in sustainability and Trust Wallet, its official multi-coin wallet and DApps browser.
Market cap: unknown
Circulating supply: unknown
Historical price fluctuations: $1.19 — $1.25 (~1 £)
Stabilization: Collateralized 1: 1 by the Great British Pound (GBP), reserves are stored in Binance’s bank.
Stably is the creator of Stably Dollar (USDS) & Stably Prime. Stably states the “Stably Dollar is the 7th largest United States Dollar backed Stablecoin in the world, featured on major crypto exchanges like Binance and Bittrex.” Stably Prime claims to be a borderless account with a multitude of financial services and products, customizable to the individual or institution’s specific needs.
In April 2018, Stably announced the development of StableUSD, later changing its name to Stably Dollar (USDS). USDS is a transparently regulated Stablecoin created by Stably, Inc. USDS is a fiat-collateralized token pegged 1: 1 with the United States Dollar (USD) held by a third party custodian. Stably Inc. opened early access to Stably Dollar on the Ethereum blockchain in November 2018.
Stably Dollar is a reserve backed Stablecoin founded by Kory Hoang, Bryan Guy, David Zhang, and Amiya Diwan, the founders of Stably Inc. The token was designed to fill needs other Stablecoins lacked and provide a price stable asset.
Stably states, “Our mission is to make financial transactions faster, cheaper and more transparent through a Borderless Neobanking platform powered by blockchain, Stablecoins and open finance APIs.”
Stably Dollar (USDS) is secured by US dollars held by Prime Trust, an American regulated trust company. According to the company’s blog, Stably Dollar (USDS) uses a proven centralized model to fully back up each issued token. The emission process will allow the use of Bitcoin (BTC), Ethereum (ETH) or Tether (USDT).
The transferred cryptocurrencies will be converted into US dollars in the free market through the intermediary of a third-party manager. The corresponding amount in Stably Dollar (USDS) will then be released and sent to the client through a smart contract, ForkLog reports.
Stably.io states “Stably USD (formerly “StableUSD”), also known as USDS, is a US Dollar-pegged Stablecoin fully backed 1 to 1 and redeemable for USD held in an FDIC-insured trust account managed by Prime Trust, a state-chartered trust company in Nevada who is the token’s official regulated trustee and administrator. USDS is currently the 7th largest USD-backed stablecoin in the world and it is also featured on major cryptocurrency exchanges like Binance, Binance DEX and Bittrex. USDS is based on the ERC-20 token standard for Ethereum and the BEP-2 standard for Binance Chain at the moment and we will expand USDS to more blockchain protocols in the future, including EOS and Stellar.”
Stably predicts, “In the near future, Stably and our regulated partners will release more Stablecoins backed by other national currencies as well as commodities and precious metals such as gold and silver. We will also expand to other blockchains that have better features such as speed, scalability and security.”
Market cap: $1,440,845
Circulating supply: 1,594,299 USDS
Historical price fluctuations: $0.89 — $1.13
Stabilization: Collateralized: 1: 1 by the United States Dollar (USD). Backed by USD and held in reserve by the Prime Trust Company.-END-
Thank you so much for reading. If you’d like to see and support my work, please check out the sites below.
I’m out to decentralize education and make the best stablecoin for our children over at GIVE Nation. You can help me by giving positive input or joining our efforts to better impact the planet. Thank you so much.
Sam wrote the first book on Stablecoins in 2017. The unbiased text takes complex practices and simplifies concepts for most audiences. In February 2020 Sam and her partners ‘Complete 2020 Guide to Stablecoins’ sat as the #1 New Release in Business and Money on Amazon Books. *Visuals and self publishing done by a 16 year old Sam personally mentors: Koosha Azim, Silicon Valley, CA. Sam’s second book, ‘Stablecoin Economy,’ a university text, released May 14th 2020.