A research project conducted by Diar shows that new stablecoin solutions have raised more than $240M in investor backing by companies like Andreessen Horowitz, Bain Capital Ventures, Pantera, DCG, Polychain, MetaStable, 1confirmation and Naval Ravikant. These backers make up at least $133M in capital raised and make up the chunk of stablcoin investors. Seven of the coins are built on the Ethereum blockchain and include Basis, nUSD, TrueUSD, MakerDAO, Fragments, StableUSD and Circle USD.
The report states that Ether is the most stable coin in terms of price volatility compared to the bunch, with TrueUSD and Dai following behind. Tether is subject to many claims that it’s backed by the US dollar in a 1:1 ratio, but reports have also stated that it’s been used to manipulate Bitcoin’s (BTC) price.
“I have long suspected that in the event Tether and Bitfinex has the money they claim to have, we’d have to inspect the order of the transactions to ensure they were not running pump and dumps with fake money.Something that is very interesting is watch what happens when GDAX goes down, the volume on Bitfinex dries up dramatically… until GDAX comes back online.
Backers address concerns when they hired a law firm to review their reserves and also said that an official audit isn’t possible. The firm confirmed that the company’s practices showed more than the dollar value of all Tether coins in circulation that day and no independent audit has yet been released.
This just goes to show that even with $240M in backing, there’s still no perfect stablecoin and we’re still far from it. No stablecoin is stable enough to be considered 1:1. Even in the world of crypto, stablecoins can fluctuate just as much as a regular token. A report from Diar shows that BitShares’ bitUSD had a 67% volatility annually and was at the top of the list.
Stablecoins still remain the ideal coin in terms of cryptocurrency because they provide real stability and minimal volatility built on smart contract platforms. They can help facilitate mainstream adoption worldwide.
Long-time reader of crypto. One of the first graduating classes of Blockchain and Future Trends. Writer, journalist, and newbie technical analysis price speculator. Learning about the development of cryptocurrency and blockchain technology around the world is my job. ICOs, whitepapers, and cryptoculture are my things.
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