​​ Stablecoins And How Do They Work? Digital currencies can | Alp World News

​​ Stablecoins And How Do They Work?

Digital currencies can undoubtedly solve the problem of asset decentralization and bring the financial system to a new level. But the need for stable assets equal to centralized ones, as practice shows, is necessary.

USDT — «Dollar Twin»
Tether (USDT) is pegged to $1 due to the full provision of reserves in the national currency: for each Tether token minted there is $1. Although Tether is the largest and most widely used dollar-denominated stablecoin with an average daily exchange turnover of about $ 30 billion as of January 2020, Tether’s reserves are held by financial institutions.

Dai (DAI) — «Independent Coin?»
Dai (DAI) is backed by cryptocurrencies such as ether (ETH). The value of this coin is pegged to $1 through protocols that are governed by the voting of members of the decentralized autonomous organization and smart contracts. DAI security can be easily verified by users at any time, indicating a decentralized asset system. In the context of market capitalization, DAI is a native stablecoin, also widely used in the DeFi ecosystem.

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