How are stablecoins different from other cryptocurrencies, what are they good for and why have they become so popular? Let’s find out!
The first and most striking difference between stablecoins and regular tokens is that they keep all the advantages of cryptocurrencies (decentralization, transparency, anonymity) while being totally unaffected by volatility issues. As a rule, they are pegged to a fiat currency.
By the way, there are stablecoins that are pegged to other cryptocurrencies — a form of asset tokenization. For instance, to be able to use Bitcoin in DeFi projects on the Ethereum blockchain, wBTC — a tokenized Bitcoin, was created.
Some stablecoins are backed by real assets, while some maintain their peg through algorithms only.
In the field of DeFi stablecoins are playing an integral part and are used as the foundation for a lot of protocols. Our project is no exception.
This way stablecoins serve as a bridge between the world of traditional finance and that of cryptocurrencies. They are vitally important in increasing cryptocurrency technology adoption, making it more and more widespread each day.