$USDC One of the characteristics of the digital currency market is its volatility, which is why in response to this situation, #Stablecoins stablecoins were created; they are cryptocurrencies whose value is linked to that of another currency, commodity, or financial instrument, mainly the dollar, and their value fluctuates around $1.00.
These coins aim to provide an alternative to the high volatility of more popular cryptocurrencies.$BTTC $BTC among many others.
The virtue of stablecoins is that they aim to address the situation of volatility by promising to keep the value of the cryptocurrency stable:
Fiat-backed stablecoins maintain a reserve of a fiat currency (or currencies) such as the US dollar.
Those backed by another cryptocurrency, derived from the fact that reserve cryptocurrencies can also be prone to high volatility, such stablecoins are over-collateralized, meaning that the value of the cryptocurrency held in reserves exceeds the value of the issued stablecoins.
Algorithmic stablecoins may or may not have reserve assets. Their main distinction is the strategy of maintaining the value of the currency stable by controlling its supply through an algorithm, essentially a computer program that executes a pre-established formula.
There are various stablecoins but with different peculiar characteristics, one of them is the earning value granted that makes them more attractive. Which one do you have? Let me know.
Excellent early morning, today is a day of insomnia ♥️. A glass of milk to sleep.
