GAUGECASH is a new monetary decentralized system, empowering users to make stable payments on-chain or store value while hedging against the volatility risks of any single fiat currency. Our work deeply involves stablecoins, so why don’t we talk about what stablecoins are? How are stablecoins different from other cryptocurrencies, what are they good for and why have they become so popular? Let’s find out!
The first and most striking difference between stablecoins and regular tokens is that they keep all the advantages of cryptocurrencies (decentralization, transparency, anonymity) while being totally unaffected by volatility issues. As a rule, they are pegged to a fiat currency.
By the way, there are stablecoins that are pegged to other cryptocurrencies — a form of asset tokenization. For instance, to be able to use Bitcoin in DeFi projects on the Ethereum blockchain, wBTC — a tokenized Bitcoin, was created.
Some stablecoins are backed by real assets, while some maintain their peg through algorithms only.
In the field of DeFi that is becoming popular today, stablecoins are playing an integral part and are used as the foundation for a lot of protocols. With their help, investors and traders avoid unnecessary volatility.
Many modern companies are already beginning to accept this type of assets as payment, since it has become the safest way to implement new technologies while maintaining the traditional finance models. A good example is how Walmart is developing its own stablecoin.
This way stablecoins serve as a bridge between the world of traditional finance and that of cryptocurrencies. They are vitally important in increasing cryptocurrency technology adoption, making it more and more widespread each day.
