Why is stablecoin interest so high?
In thıs article, we explain the topics of cryptocurrency using analogies stories and examples. So today, we want to explain what stablecoins are and how you can best use them to leverage your crypto trades.
What is a stablecoin?
A stablecoin is technically a utility token built upon another coin’s blockchain. If you don’t know the differences between a coin and a token is you should check out our previous article on that topic. But the entire goal of a stablecoin is to create a cryptocurrency that isn’t volatile and doesn’t change the price.
Stablecoins offer the convenience, privacy, and security of crypto while offering the stability and trust of fiat money.
A stablecoin is pegged to the USD and should always equal 1 USD theoretically.
Bitcoin, the first cryptocurrency, was created to be used as a store of value. However, since it’s not widely adopted and there aren’t very many regulations on it, yet the price fluctuates a lot. So much so that it is classified as a speculative investment. So what if you want to store money using crypto technology, but you don’t want to risk your investment with the price fluctuations of crypto in today’s world.
Well, you can use a trusted stablecoin. Before we get too deep in the stablecoins, you first need a refresher on the differences between a centralized exchange and a decentralized exchange.
A centralized exchange is an exchange that is owned by one entity, like Coinbase. But they allow you to buy and sell cryptocurrencies…