Posts

Stable coin saga Unfolding......

avatar of @rehan12
25
Rehan
@rehan12
·
·
0 views
·
3 min read

Stable coin market has been shaking the entire crypto market for the last few days. The crumple of a namely stable coin UST has ripped off people in ways which are probably indescribable! Which led to doubt, uncertainty over the stable coins. As of now, crypto users are utterly trying to find the best suitable stable coin for them to add up in their respected portfolio. In amidst this tough situations where the stable coin is acting in those ways which it was not suppose to (de-pegging), it is leading towards a ripple effect on the the other known stable coins within the market.

For starters with the highest marketcap of $73,184,054,372 USDT has been one of those stable coins which has been running in the blockchain for a very long time. Even though I am not a very big fan of tron blockchain but USDT has been seen to be used in a large scale in everyday transactions. Which precisely made it vulnerable to the recent incident like UST. Users are eyeing the integrity of USDT. Where the backed up funds to keep the $1 mark of USDT is upon question right now. Which is leading towards doubts and insecurity for many users. And yes, it is big question of concern.

Just imagine your stable coin fund has come down from $100k to $60!

How devastating it would be?

Due to this issues of trust and FUD, Tether published a report, where there are few key points which is assuring the stability of the asset for now.

  • Consolidated total assets amount to at least US$82,424,821,101.
  • The consolidated group’s consolidated assets exceed its consolidated liabilities If you are into more detailed information here's a report for you to go through.

https://tether.to/en/assurance-opinion-once-again-re-affirms-tethers-reserves-fully-backed-reveals-significant-reductions-in-commercial-paper-and-increase-in-us-treasury-bills/

Even after all this as a crypto user I am quite skeptical about USDT. I could be panicking over nothing but I am quite negative about USDT don't know why but it is what it is.

USDC over USDT

According to a recent report there has been a change of course in stable coins. While USDT has been loosing its supply compared to USDC. In the recent switch of minds users seems to be relying more on USDC than of USDT. Which precisely states an increase of more than 2.5 billion USDC. Over the last few weeks there has been a decline for the circulating supply of USDC but this recent incident of UST has driven people to diversify their stable coin reserve across crypto.

Image source

KEY points regarding USDC

  • USD Coin (USDC) is a fiat-collateralized stablecoin stable coin which is fully backed by fiat money
  • USDC reserve assets are held in segregated accounts with U.S.-regulated financial institutions

From the way that I see it, USDC seems to be quite reliable at this point. But even after a fully backed collateral there has been a massive downside in a blockchain. Even though the circumstances were different but any loophole could make a contract vulnerable thus loosing the funds.

If I were to hold any stable coin, I would probably go with the following

  • USDC
  • BUSD
  • HBD (for a variety of reasons)
  • Keep liquid money

This volatile market has taught us quite a lot of aspects. Even stable coins are not as reliable as they are supposed to be. Which arises the question, how stable is your funds in stable coins? Better be prepared for this sort of Luna situations in the future!

Best regards
Rehan

Posted Using LeoFinance Beta