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Digital currencies that are based on the blockchain are collectively referred to as crypto. As they can be exchanged for potentially profitable returns, cryptos have gained popularity among the general public.
Many cryptos provide robust utility features like cross-platform compatibility, smart contracts, and blazing-fast transaction times.
However, other characteristics of cryptos, such as their comparatively high volatility and unpredictability, may cause both current and potential investors to react with caution and moderation.
In contrast to other cryptos like Bitcoin, Ethereum, and others, there are other cryptos whose value fluctuates very seldom. These coins are known as “Stablecoins.”
[wd_hustle id="4" type="embedded"/]Without further ado, let’s look at what stablecoins are.
What are stablecoins?
Stablecoins are digital assets whose value is tied to another asset. Stablecoins that are most widely used “peg” themselves to the US dollar. While still providing the advantages of digital transactions, stablecoins eliminate the risk associated with fluctuations in crypto prices. They are thus a preferable alternative to conventional tokens as a medium of exchange.
These tokens provide the best of both worlds by bridging the gap between fiat currency and digital payments. The significant type of stablecoins is given below.
Types of Stablecoins
- Fiat-collateralized Stablecoins: Stablecoins that have fiat currency backing, such as the US dollar, the British pound, or the euro, are known as fiat-collateralized stablecoins.
- Commodity Collateralised Stablecoins: Commodity-backed stablecoins are backed by tangible assets like gold, oil, and real estate.
- Crypto-collateralized Stablecoins: Crypto-collateralized stablecoins are backed by other cryptos. Such stablecoins are over-collateralized, which means that the value of the crypto kept in reserves exceeds the price of the stablecoins created because the reserve crypto could be volatile.
- Algorithmic Stablecoins: In general, stability depending on market supply and demand, can be achieved with algorithmic stablecoins. It’s also important to note that algorithmic stablecoins have the highest levels of independence and decentralization.
Regardless of your experience level, it would be best to always examine the top-performing cryptos before investing. This is because the leading cryptos to invest in are subject to rapid change that may surprise you. That’s why we have curated a stablecoins’ list for you to invest in 2022.
Top 6 Stablecoins list to invest in this October
#1 Bitcoin (BTC) – The Digital Gold
Bitcoin (BTC) is the first coin developed in 2009 by an individual or a group of individuals using the pseudonym Satoshi Nakamoto. Similar to the majority of cryptos, BTC records transactions across a network of many thousands of computers using a blockchain or ledger. However, Bitcoin is secure and protected from fraudsters because updates to the distributed ledgers have to be validated by cracking a cryptographic puzzle, a procedure known as Proof-of-Work (PoW).
Bitcoin is commonly referred to as “digital gold,” making it a reliable investment. According to economists, this has stayed the same; it’ll still be the most popular cryptocurrency in the coming years.
#2 Ethereum (ETH) – A Smart Contract Blockchain
Another choice for purchasing the most widely used crypto here on the market is Ethereum, as many people think it has a more considerable price potential than Bitcoin. In addition, the platform provides dApp developers with a means of implementing smart contracts into their applications, possibly disrupting various industries.
The release of Ethereum 2.0 has caused a stir because the platform will switch to a Proof-of-Stake mechanism, which will significantly increase speed and reduce fees.
#3 Curve (CRV) – An Automated Market Maker Platform
By only allowing liquidity pools composed of identically behaving assets, Curve is a famous Automated Market Maker (AMM) platform that allows a very efficient means to swap tokens while retaining low fees and little slippage. Furthermore, as Curve integrates with other DeFi protocols and offers incentives in the form of CRV tokens and interest, the liquidity providers who provide the pools with tokens benefit from cheaper fees as a result of this strategy.
#4 Chainlink (LINK) – A Decentralized Oracle Network
A decentralized oracle network called Chainlink provides smart contracts access to a trustworthy and secure source of real-world data. Since stablecoins collectively have immense value in DeFi applications, they need the same commitments and reliability guarantees as the blockchains they run on.
Chainlink uses decentralization to verify data to assure its accuracy. Chainlink ensures that all off-chain data transmitted on-chain is accurate by building a decentralized oracle network that employs smart contracts to check the oracle’s integrity, order match, and aggregate outcomes.
#5 Solana (SOL) – A Next-Generation Web3 Platform
The Web 3.0 platform Solana was designed as a publicly listed blockchain-based crypto network. Solana has created a fully integrated, user-owned, and operated cloud platform using a global network of decentralized computers. In contrast to previous networks, Solana allows high-speed and inexpensive transactions on a single-layer blockchain, eliminating the need for additional scaling solutions.
The SOL token is used to:
(i) power Decentralized Applications (dApps),
(ii) conduct payments,
(iii) pay network fees,
(iv) stake tokens to secure the network, and
(v) support network governance.
#6 Polkadot (DOT) – A Decentralized Multi-Chain Network
Polkadot is a scalable, trustworthy, decentralized multi-chain network for the upcoming web. It can be produced using Substrate, a framework that facilitates the construction of bespoke or pre-built blockchains.
Polkadot’s interoperability protocol uses segments, or shards, to expand the network and develop a completely user-controlled decentralized web. Additionally, it can connect distinct blockchains, open networks, and oracles to create a new kind of web that enables direct information and transaction interchange.
Curtain thoughts
Stablecoins are a convincing substitute for the market’s volatile crypto tokens. They combine the simplicity of crypto transactions with the reliability and security of fiat money. Despite the fact that stablecoins come in a variety of forms, those with the largest market capitalizations are fiat-backed. Therefore, consider including the aforementioned cryptos in your portfolio if you want to invest in the crypto market.
Frequently Asked Questions
Is Pi Cryptocurrency Safe?
Pi Network captured the crypto community’s interest even before it officially debuted. Its innovative mobile mining approach and user-friendly design simplify crypto adoption for a broader audience. Some users see this as a chance to get engaged in the crypto from the beginning and profit in the future, similar to how early Bitcoin adopters made huge profits by mining and keeping the coin. Other users have compared Pi to a worthless multi-level marketing (MLM) scheme.
Which Cryptocurrency Is Best To Invest In 2021?
Many altcoins are flourishing to invest in. Some cryptocurrencies with great potential are Ether, Ripple, Tron, and more. Investors are trying to diversify their portfolios and are flocking to the leading cryptocurrencies. Many growing businesses are already accepting cryptocurrency as acceptable payment methods.
Is Ethereum Safe To Invest?
The Bitcoin market is unquestionably more volatile than the stock market. This may not be the market for you if you are incredibly risk-averse. Ethereum, on the other hand, may be a terrific investment for you if you're a diamond-handed investor who won't lose sight of short-term losses. Ethereum is a relatively safe investment as it is also based on blockchain.
What Is Virtual Currency?
Virtual currency is a type of uncontrolled digital currency that can only be used online. It is exclusively stored and transacted using designated software, mobile or computer applications, or unique digital wallets, and all transactions are conducted through secure, dedicated networks. Because digital currency is just currency issued by a bank in digital form, virtual currency is not the same as a digital currency. Virtual currency, unlike ordinary money, is based on a trust structure and cannot be issued by a central bank or other banking regulatory organization.
What Is The Meaning Of Crypto?
A cryptocurrency is a digital currency that is secured by the process of cryptography, making counterfeiting and double-spending almost impossible to happen. Blockchain technology is used to produce cryptocurrencies ( a distributed ledger enforced by a distributed network of computers). Cryptocurrencies are distinct in that a centralized authority does not issue them.
How Many Cryptocurrencies Are There?
There are over 5000 other digital currencies available on the internet in addition to Bitcoins. The only problem is that they haven't gotten the users' attention. Besides Bitcoins, a few other digital currencies have gained popularity among users. It's been more than ten years since Bitcoins were first released, and now they've achieved new heights thanks to their phenomenal success.
What Are The Best Cryptocurrencies To Invest In?
The best cryptocurrencies to invest in would be the ones you study and analyze in detail. Some of the most popular cryptocurrencies include Bitcoin, Ethereum, and many altcoins such as Tron, Ripple, Litecoin, etc.
Who Invented Cryptocurrency?
Satoshi Nakamoto invented cryptocurrencies and the technology that makes them function in 2009. The presumed pseudonymous individual or persons who invented Bitcoin used this identity. In addition, Nakamoto created the first blockchain database. Even though many people have claimed to be Satoshi Nakamoto, the person's identity remains unknown.
How Safe Are Cryptocurrencies?
Cryptocurrencies can be safe, but your crypto wallets can be hacked if proper security steps are not performed. There are also dangers and uncertainties associated with investments, and we cannot declare any virtual currency investment risk-free. Buying and selling cryptocurrencies does not have to be dangerous if the trader is well-versed in the market and treats his coins with care.
Is Crypto Legal In India?
Cryptocurrencies are legal in India, and anyone can purchase, sell, and exchange them. It is currently uncontrolled, as India lacks a regulatory structure to oversee its operations. Per the Ministry of Corporate Affairs, companies must now record their crypto trading/investments within the financial year. In cases where a person receiving the gains is an Indian tax resident, or the cryptocurrency is regarded as domiciled in India, cryptocurrency transactions have been taxable in India
Disclaimer: Cryptocurrency is not a legal tender and is currently unregulated. Kindly ensure that you undertake sufficient risk assessment when trading cryptocurrencies as they are often subject to high price volatility. The information provided in this section doesn't represent any investment advice or WazirX's official position. WazirX reserves the right in its sole discretion to amend or change this blog post at any time and for any reasons without prior notice.
