🪙 Stablecoins: The Good, The Bad, The staking.

Stablecoins have been growing rapidly, here are some reasons and risks.

March 24, 2022

Contents:

  • 🪙 Stablecoins: The Good, The Bad, The staking.

  • 🎲 📈 The Staking

  • 🚀 Want your salary in Crypto?

  • 👀 Under the Radar

  • 🛠️ JOBS Section

  • 📰 ICYMI

  • 🙏🏻 Grateful for…

  • 💸 Coupons

🪙 Stablecoins: The Good, The Bad, The staking.

Stablecoins are cryptocurrencies where the price is designed to be pegged to a cryptocurrency, fiat money, or to exchange-traded commodities. 

The idea of stablecoins is not entirely new. In the 17th century the Bank of Amsterdam shared an economic structure with modern stablecoin proposals. Since then, there has been a lot of ideas surrounding the concept of having tokens or digital currencies pegged to a Fiat currency, precious metals, or basket of goods.

Bitcoin and cryptocurrencies have given rise and suitable use-cases to stablecoins.

👍 The Good - Stablecoins can provide a safe heaven to traders when crypto volatility is high. They create a bridge between digital tokens and traditional commerce. They have also drawn bipartisan interest as a cheaper and more accessible way to send money (remittances) or make transactions outside of the traditional financial system and across international lines.

Lately, stablecoins are being used extensively in DeFi protocols, which offer higher yields for these coins than ever before, along with the stability (inflation aside) of a fiat currency. This has become every attractive to those institutions and individuals unwilling to stomach the unstable crypto market, pushing the total market capitalization to around $180 billion.

“If stablecoins, are backed by high-quality assets, their risk is quite low and they can form a building block, a cornerstone of a payments system,” - said Nellie Liang, the under secretary of Treasury for domestic finance.

👎 The Bad - The possibility that some stablecoins might not be fully backed, or are unable to maintain a peg to the dollar or other currency, are two key issues. Governments worldwide have expressed concerns about a stablecoin issuer going bankrupt in times of crisis if they lacked enough cash or other easily sellable assets to cover redemptions en masse.

Policymakers also fear a run on a stablecoin could trigger broader chaos in financial markets if the issuer struggles to cover their losses.

There is also the risk of certain platforms being hacked or pulling the rug on investors as we have seen in the past. There are many issues and risks associated with stablecoins that need to be considered and they are being examined by policymakers.

🎲 📈 The Staking - A way of earning rewards for holding certain cryptocurrencies. Many long-term crypto holders look at staking as a way of making their assets work for them by generating rewards, rather than collecting dust in their crypto wallets.

Recently, Anchor protocol has been on the crypto news cycle for it generous APY (annual percentage yield) for UST (Terra’s stablecoin) staking. Anchor currently offers 19.48% APY and has a Total Value Locked (TLV: the overall value of crypto assets deposited in a decentralized finance (DeFi) protocol) of more than $17 billion UST.

Usually, as TLV increases, the APY decreases, but Anchor has been able to offer more than 19% APY for over a year even though their TLV has increased consistently.

There are many other protocols offering very attractive yields:

The top three options on the image above are for stablecoin farming strategies. Yield farming involves lending or staking cryptocurrency in exchange for interest and other rewards.

Always do your own research and be extremely careful when participating in staking and farming protocols. Some of the risks associated are: Impermanent loss, smart contract bugs, volatility, fraud, and rug pulls among many others.

🔖 Platform of the Week - COINDIX

The mission of Coindix is to gather pieces of the DeFi ecosystem in one place and under one simple and intuitive interface.

As you know, projects on the DeFi ecosystem are like building blocks. DeFi projects are interoperable and often are built on top of each other, creating infinite possibilities. However, the current DeFi ecosystem is fragmented and difficult to navigate. Coindix can help you find best DeFi project for your needs capable of filtering them by chain, APY, protocol, TLV and many other variables.

🚀 Want your salary in Crypto?

The number of employees asking to be paid in crypto is increasing by ~10% every month. 

Speed, efficiency, and cost transparency are some of the most attractive benefits, especially for international employees and contractors who have to deal with frustrating SWIFT admin and fees for international bank transfers. 

VC funding in the crypto payroll has seen exponential growth. In the last year alone, four of the top contenders (BitPay, BitWage, Papaya Global, and Deel) have cumulatively attracted $934m, according to Crunchbase data. (Source: Trends.co)

👀 Under the Radar

  • Ethereum Classic - (ETC) price climbed 70% the past week, ignoring a deadly "death cross" on the weekly chart, as traders raised their bets on its potential to become a haven for miners fleeing the rival Ethereum blockchain.

  • Cardano - (ADA) has increased more than 10% the past few days after its staking strategy was approved by Coinbase.

  • Axie Infinity - (AXS) the governance token for the Axie Infinity game. Token holders will be able to shape and vote for the direction of the game universe. This is unlike traditional games where all decisions are made by the game developers. AXS holders will be able to stake their tokens to earn more AXS and even vote for governance proposals.

  • Holo - (HOT) Peer-to-peer distributed platform for hosting decentralized applications built using Holochain, a framework for developing DApps that does not require the use of blockchain technology. The goal of Holo is to serve as a bridge between the broader internet and apps built using Holochain, offering an ecosystem and marketplace in which DApps are easily accessible, as they are hosted on the internet by Holo network participants.

🛠️ JOBS Section - Together with TheDefiant.io we bring you.

Defiant Jobs:
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📰 ICYMI

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