What’s The Best Stablecoins - Stablecoins Part 5
The question we aim to answer today is, out of all of the stablecoins, which are the best? We’ll cover them all briefly and explain the pros and cons of each.
This is a list of many of the top stablecoins: https://coinmarketcap.com/view/stablecoin/
We have covered many stablecoins, but here we will go over a quick summary of the major coins we’ve discussed and what I personally recommend using.
Terra (LUNA) & UST - Failed algorithmic stablecoin
DEI – Failed algorithmic stablecoin
Titan & IRON Finance – Failed algorithmic stablecoin
DAI – Decentralized stablecoin backed by crypto assets. More than 50% backed by USDC creating a major vulnerability and risk with fiat exposure and centralized control from Coinbase.
Wrapped Bitcoin WBTC – This is a coin on Ethereum pegged to Bitcoin. It’s a different type of stablecoin, though many would consider this just a bridged asset now. You still rely on the DAO that manages this though just like any other stablecoin.
Coinbase USDC – Coinbase’s version of USDT backed by multiple fiat assets and mainly issued on Ethereum. They have the second most banned addresses out of the major stablecoins and are extremely centralized and backed by Blackrock.
Tether USDT – Backed by multiple fiat assets and issued on multiple networks, but best used on the TRC20 network. Great for liquidity and bad for decentralization. They have the most banned addresses out of any major stablecoin and are extremely centralized.
TrustToken TUSD – Real time attestation – Fully fiat backed - Trust Token has real time attestation for their cryptocurrencies: https://www.trusttoken.com/products
Binance & Paxos (BUSD & USDP) – Like the others, their attestations don’t show much or prove much.
Gemini Dollar GUSD – A smaller stablecoin that’s just as centralized as other fiat-backed coins like USDT or USDC.
Tron DAO Reserve USDD – Tron backed algorithmic coin I expect to fail.
Paxos Gold PAXG – Backed by gold assets. Because your gold is held in a centralized storage, you still have to trust they won’t lose it and will still honour your pegged value. The issues beyond that are lower liquidity and adoption.
XAUT – Same issues as PAXG except with even lower liquidity and adoption.
Hive’s HBD – Backed by Hive & policy from witnesses. This is a great algorithmic stablecoin, but due to the nature of algorithmic stablecoins, I personally am steering clear of them. I will note that I did hold HBD for a long time with no issues and made some great interest in it as well.
CBDCs –Central bank digital currencies are very centralized and provide some benefit over USDC or Tether but may introduce many new problems. View all the CBDCs in their current phases https://www.atlanticcouncil.org/cbdctracker/
There are so many stablecoins out there and we could spend tons of time reviewing them all, but the general sentiment doesn’t really change. If your stablecoin is decentralized, it tends to have very low liquidity or some other issue. If your stablecoin has great liquidity, it may be extremely centralized.
At the end of the day, you still have to rely on and trust someone else which goes against the general ethos of cryptocurrency. You should generally want to hold coins that are privacy-oriented, pro-freedom, give you the full control and ownership, and are decentralized. Even when you look at their audits or attestation reports, most times it’s just a page or two claiming that their numbers are correct with no actual proof. You always end up relying on some third party and there’s nothing stopping them from screwing you over with these centralized stablecoins and almost all of them are to some degree. This is not easy to find, and I haven’t been able to land on a happy compromise with any stablecoins listed above. I personally will just invest in Bitcoin and Ethereum.
Do you hold any stablecoins? Do you trust that they are backed 100%? What’s the best stablecoin? Are stablecoins reliable? What should someone use instead? Let me know what you think about this in the comments below and don’t forget to subscribe!
*Disclaimer: This is not financial advice and is purely for entertainment purposes. What you see, hear, or read is my personal opinion, and any statements made are based on my views and should not be misconstrued as fact. My crypto portfolio may or may not be simulated*
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nice article sir