零点课堂 | What Are Stablecoins?（3）

Stablecoins use cases

Collateralized stablecoins are by far the most common in practice. Examples of these coins include USD Tether (USDT), True USD (TUSD), USD Coin (USDC), and Binance USD (BUSD). However, there are also instances of the other two aforementioned categories that are currently available on the market. Bitshares USD and DAI are crypto-collateralized coins, while Carbon and (the now-defunct) Basis are examples of algorithmic variants.

This list is far from exhaustive. The market for stable digital currencies is broad, something evidenced by the proliferation of hundreds of stablecoin projects.

Stablecoins pros and cons

The main advantage of stablecoins is their potential to provide a medium of exchange that complements cryptocurrencies. Due to high levels of volatility, cryptocurrencies have been unable to achieve widespread use in everyday applications such as payment processing. By providing higher levels of predictability and stability, these stabilized currencies solve this ongoing problem.

By acting as a safeguard against volatility, stablecoins may also be able to play a role in integrating cryptocurrencies with traditional financial markets. As it stands, these two markets exist as separate ecosystems with very little interaction. With a more stable form of digital currency available, it’s very likely that cryptocurrencies will see increased usage in loan and credit markets that. In addition to their usefulness in financial transactions, stablecoins can be used by traders and investors to hedge their portfolios. Allocating a certain percentage of a portfolio to stabilized coins is an effective way to reduce overall risk. At the same time, maintaining a store of value that can be used to buy other cryptocurrencies when prices drop can be an effective strategy. Likewise, these coins can be used to “lock-in” gains made when prices rise, without the need to cash out.

Despite their potential to support widespread cryptocurrency adoption, stablecoins still have certain limitations. Fiat-collateralized variants are less decentralized than ordinary cryptocurrencies, as a central entity is needed to hold the supporting assets. As for crypto-collateralized and uncollateralized coins, users must trust the wider community (and the source code) to ensure the longevity of the systems. These are still new technologies, so they will need some time to mature.

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