The Impact of the Asset-backed Cryptocurrencies to the Crypto Industry
In a decentralized world, price fluctuation is something that crypto enthusiasts have become accustomed to, especially the emotional roller coaster of huge price swings. The crypto market can be described as pirates at sea where the bigger ships are always trying to conquer the smaller ships to amass wealth and treasures. Crypto enthusiasts found a way to curb all these highly volatile crypto markets by introducing stable cryptocurrencies, which serve as a reliable hedge during market fluctuations.
There are three basic kinds of asset-backed cryptocurrencies, and these employ various mechanisms to keep the funds of its users away from the crypto market swings. Fiat-backed cryptocurrency, Commodity backed, and Cryptocurrency backed assets are the common ones that are widely used in this industry, and most of them are all deployed on the Ethereum network to ensure maximum security and transparency of service. Described below are some of the few asset-backed cryptocurrencies that are commonly used in the cryptosphere.
It is a gold-backed digital currency deployed on the Ethereum blockchain network where 1 DGX equals 1 gram of gold securely stored and managed by the companies’ DIGIX group. Their fully transparent and audited document trail ensures that the total amount of gold deposited is always equal to the amount of DGX Tokens in circulations. DIGIX leverages both Bureau Veritas and London Bullion Market to ensure that all physical golds deposited are rightfully owned and 99.99% pure.
Gemini USD (GUSD)
A fiat-backed cryptocurrency regulated by a New York Trust Company ensures that there is always a 1:1 balance between this cryptocurrency and the United States Dollar. One unique feature of GUSD the combination of offline and online strategies in minting new tokens. The token generating smart contract adopts offline systems’ security yet runs with an online system’s flexibility in creating new tokens. OKEX and Huobi Exchange platforms serve as the reservoir of GEMINI USD, and users can make purchases of GEMINI USD through either their OTC or Exchange services.
True United States Dollar is another fiat-backed cryptocurrency backed on a 1:1 ratio with the US Dollar and with funds stored in an escrow bank account. It’s a highly liquid crypto-asset deployed on the Ethereum blockchain and spread across over 100+ market platforms (exchange and OTCs inclusive). Purchasing TUSD occurs within just a few clicks through any of the platforms mentioned above.
The Benefits Stable Cryptocurrencies offer to Crypto Enthusiasts
Bitcoin, Ethereum, or none of the major altcoins stand the chance of being described as a good payment method when the global adoption of cryptocurrencies set in because of how volatile they are. That is why crypto enthusiasts developed stable cryptocurrencies to curb cryptocurrencies’ volatility when used in purchasing items. Imagine giving an item worth $1000 US to your customer, and the market crashes so deeply your income slashes by $200. This feels like daylight robbery of which you have no control of.
Through the use of stable cryptocurrencies, merchants can now trade without any fear of market volatility. There is a common thought shared by most people in the crypto industry that if digital currencies are ever going to be used in purchasing items, it would surely be with the use of stable currencies of which TUSD, GEMINI USD, Tether, etc.
Crypto traders also leverage these stable coins to keep their earned income from crashing at the end of the daily trading.
Commodity backed stable currencies as DGX have also made it possible for users to hold fractions of some commodities digitally, something that historically wasn’t possible due to the physical nature of gold bullion.
The use of stable cryptocurrencies has been a great tool in regulating the highly volatile crypto market. Most of these offers are standard ERC 20 Tokens, and therefore provide ease of use and a high level of support within communities, exchanges, and wallet offerings.
Transactions are secure, and unlike bitcoin, fees remain affordable whilst still ensuring a high level of security. Buyers and sellers can now engage with each other using stable currencies and have absolutely no fears of sudden crypto market crashes. As a pirate of the sea, knowing when to move your profits onto stable ground is sometimes the secret to securing your financial goals.