Editor's Note: This article comes fromhash pie(ID: hashpai), author: hashpai, forwarded with authorization.

Editor's Note: This article comes from

hash pie

(ID: hashpai), author: hashpai, forwarded with authorization.

Since the birth of Bitcoin, the digital currency market has grown to a market value of hundreds of billions of dollars, and more than 1,700 digital currencies have been issued in the field. However, under the market environment where prices may fluctuate sharply at any time and the regulatory attitude of local governments is unclear, investors in some regions lack legal currency trading channels, and investors urgently need to find alternative solutions to stable assets to reduce their currency holding risks.

As the basic stable digital currency of current mainstream exchanges, USDT has become one of the common value storage methods for investors; its daily average market circulation and market value of more than two billion US dollars are second only to Bitcoin, making other assets And practitioners can't help coveting, trying to seize the opportunity in this early market where the supply only accounts for 1% of the global market value.

In this context, stable cryptocurrencies began to increase, and the market gradually emerged. In order to let everyone have a clearer understanding of the market situation, Hashpai (ID: hashpai) sorted out the currencies and main types of stablecoins that appear today through investigation and analysis, and analyzed their characteristics. Let's start with the concept of stable currency and explain it in detail.

In essence, a stablecoin is a digital currency with a relatively stable price level

In addition to financial attributes, stablecoins will also play an important role in blockchain applications. Because compared with cryptocurrencies such as Bitcoin, whose prices fluctuate and are easily regarded as assets, stablecoins have higher market liquidity, which is conducive to the establishment of communities and token economic models within blockchain applications.

In order to achieve a relatively stable currency level, stablecoins are generally directly linked to assets with stable value such as gold and legal tender; making the currency with a unit price represent a certain purchasing power. If classified according to the type of asset collateral behind the stablecoin, we can divide the stablecoin into two categories: the asset-backed type anchored with legal tender or digital assets, and the non-asset-backed type controlled by algorithms.

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Original image from: Cointelegraph

Official website:https://tether.to/

Issue status:Among asset-based or collateral-based stable digital currencies, direct linking to legal tender is the simplest and most common approach. This type of stable currency is backed by asset reserves, and the value is equivalent to the anchor currency. The model is easy to understand and the process is intuitive, which can ensure that the currency held by users can be converted back to legal currency in proportion. The representative of this type is undoubtedly the most successful USDT at present.

①USDT issued by TetherOfficial website:

Issue status:Issued by Tether, a company registered in the Isle of Man and Hong Kong in February 2015, it is a cryptocurrency based on blockchain and Omni Layer protocols

Key members of the team:CEO Jean-Louis van der Velde and chief strategy officer Philip Potter also hold the same positions at trading platform Bitfinex

Already on-line platform:

Bitfinex, Okex, Huobi, HitBTC, Bittrex, Kraken, Poloniex and more than 40 exchanges, of which nearly half of the platforms have a daily trading volume of more than 100 million US dollars

Circulation:

It was first used as a deposit tool for the Bitfinex exchange, and was quickly accepted by the market and major exchanges; now it has developed into the ninth digital currency in the world by market value and the second in daily trading volume. However, while bearing these auras, USDT also bears a lot of infamy. The first is the questioning of black-box operations, excessive issuance, and whether the currency price is equivalent to US dollars brought about by its highly centralized management method, and the second is the market trust crisis caused by the freezing of some bank accounts, and related disputes have caused its price fluctuations increase, etc.

Official website:https://www.trusttoken.com/

Issue status:However, before other stablecoins develop, USDT will still dominate the market. It is also worth mentioning that Tether also announced earlier this year that it is currently creating EURT and JPYT linked to the euro and Japanese yen on the Ethereum blockchain, and will be compatible with the ERC20 token standard.

②TrueUSD created by TrustToken platformOfficial website:

Issue status:Created in March 2018 by TrustToken, a start-up company located in Stanford, California, it is a digital currency based on the ERC20 token standard.

Financing status:In June 2018, a strategic round of financing of US$20 million was completed, with investors including Danhua Capital, GGV Capital, BlockTower, well-known Silicon Valley venture capital Andreessen Horowitz, ZhenFund, etc.

Key members of the team:Danny An, CEO, used to be a data expert at artificial intelligence company Kernel and a product manager at PwC; Rafael Cosman, CTO, used to be a machine learning engineer at Google and Kernel

Well-known consultants:Ari Paul, CIO of hedge fund BlockTower; John Piotrowski, former Goldman Sachs vice chairman; Bill Wolf, former Goldman Sachs analyst managing director

Indian exchanges such as Binance (accounting for more than 80% of trading volume), Bitso, Bittrex, CoinTiger, Cryptopia, HitBTC, IDEX, Koinex, Kuna, Kyber Network, Upbit, and ZebPay

Circulation:

The average daily trading volume in Q2 of 2018 was 8.14 million US dollars, and the cumulative market value increased by about 783 percentage points.

The issuance model of TrueUSD is the same as that of USDT. Investors can obtain TUSD or redeem USD at a ratio of 1:1. But the difference is that TUSD's reserve situation is more transparent, because it has introduced a trust account to manage US dollar assets, and promised to regularly publish the audit report of the third-party accounting firm and the US dollar stock of the account; so that TUSD has legal protection, and Guaranteed full USD reserves and strict standard KYC/AML verification.

However, ensuring a 1:1 exchange rate and full US dollar reserves does not necessarily guarantee the stability of the TUSD price. Since its official trading in March this year, its price volatility has been significantly higher than that of USDT in the same period, and the price of TUSD once rose by more than 1.3 US dollars on May 16, the day Binance launched the transaction of this currency. Although the decoupling of TUSD from the U.S. dollar has been alleviated in only half a day, and its price has remained at around one U.S. dollar since then; however, TUSD is still questioned by the outside world about its liquidity. Analysts believe that because TUSD pursues independent custody, the team itself does not have sufficient capital reserves and market-making policies, and cannot respond and adjust to market conditions in a timely manner under special circumstances.

Related sites:http://aboutck.com/ckfintech/ckusd.html

Issue status:It is also worth noting that TUSD is a token based on the Ethereum smart contract. In addition to the handling fee when exchanging with the US dollar, it also needs to charge the transaction fee within the ETH network when transferring between Ethereum wallets.

③CK.USD launched by CK GroupRelated sites:

Issue status:Launched in November 2017 by CKFintech Crop, a wholly-owned holding company of the Canadian listed company Cascadia Blockchain Group, it is a digital currency based on the financial public chain CNET

company situation:CK Fintech Corp. was registered with the Canadian Financial Transactions and Reporting Analysis Center in April 2016 and obtained a license for financial services

Key members of the team:

Rachel Wang, CEO, has ten years of experience in international wealth management and business strategy, and has an MBA degree in international accounting and finance from the University of Windsor, Canada; Robin Guo, COO, co-founder of Yuanbao Coin; Tilektes Adambekov, representative of Asia and Europe, once worked in Wenzhou Jobs for Durham Hotel Group, Huawei, etc.Partner:

Nebulas, Aelf, QTUM, Hongyan Capital, Tianfeng Securities, BITCapital, FIBIGCapital, Steel Bull Group, Asia Blockchain Fund, etc.

Launched platforms: Allcoin and BCEX, a Vancouver-based digital currency exchange that also belongs to the Cascadia Blockchain Group, rank among the top 50 in the world in average daily trading volume

According to CK Fintech Crop., CK. USD is used in the company’s system to comply with KYC/AML as a fund settlement tool between exchanges and financial institutions, and is anchored to the US dollar. Small exchange needs can be purchased from CK’s exchanges AllCoin and BCEX at market prices, or traded on the over-the-counter trading platform OTC 789; while CK Fintech Crop. only accepts individual and institutional purchase applications of 200,000 CK. USD.

Related sites:https://stasis.net/

Issue status:Although the official stated that it will strictly conduct fund audits and promise to announce the amount of sales and repurchase reserves in a timely manner; but so far, the actual total circulation of CK. USD is still unknown. In addition, as stated in its statement, the company will not conduct microscopic buying and selling in various markets; for this reason, the price of CK USD fluctuates more than USDT and TUSD, and has been hovering between 0.91 and 1.03 US dollars since its launch.

④EURS created by STASIS platformRelated sites:

Issue status:Created by the Maltese financial token platform STASIS in July 2018, it is a digital token based on the Ethereum EIP-20 standard and anchored to the euro

company situation:EXANTE, the parent company of STASIS, issued the world's first bitcoin hedge fund in 2012, and is actively working with the Maltese government on the cryptocurrency compliance framework. The company received more than US$50 million in financing last year; STASIS is a platform established last year focusing on the tokenization of financial products and trading circulation

Key members of the team:Gregory Klumov, CEO, used to be an investor in several companies such as the US hedge fund Kerrisdale Capital Management LLC and Violin Memory, a pioneer in the field of flash storage; Vyacheslav Kim, CFO, used to be the head of corporate management and mergers and acquisitions at the Russian investment bank RB Partners

Already on-line platform:

London Exchange DSX and Europe's leading bitcoin trading platform HitBTC, of ​​which more than 88% of the trading volume is concentrated on the HitBTC platform

The issuance and management model of STASIS EURS (EURS) is similar to that of TUSD. It is issued with a 1:1 mortgage of the euro. The balance of the reserve fund is verified and announced by KPMG, one of the four major accounting firms; Weekly verification provides high-standard and continuous transparency for user assets, and can better meet European routine regulatory and risk control requirements.

Related sites:https://stronghold.co/stronghold-usd/

Issue status:According to the STASIS statement, the company’s platform received more than $100 million in applications a week after it started accepting exchanges, and obtained its first institutional user. However, the current market circulation and trading pairs of EURS are relatively small, and there are only four currency trading pairs with Bitcoin, Ethereum, USDT and DAI; and most of the trading volume is concentrated in the HitBTC platform with USDT and DAI Trading pairs of two stablecoins.

⑤Stronghold USD that Stronghold plans to launchRelated sites:

Issue status:Launched on July 17, 2018 by American financial services startup Stronghold in cooperation with technology giant IBM, it is a digital token built on the Stellar network.

Financing status:

On July 12, 2018, a $3.3 million seed round of financing was completed. Investors include angel fund investor Rick Marini, Bitcoin Foundation board member Vinny Lingham, Hack VC, etc.

Stronghold USD will be pegged to the U.S. dollar on a 1:1 basis, with reserves held by Prime Trust, a Las Vegas-based asset management company, backed by U.S. dollars from the U.S. Federal Deposit Insurance Corporation.

Related sites:https://blog.circle.com/2018/05/15/circle-announces-usd-coin-bitmain-partnership-and-new-strategic-financing/

Issue status:Its strategic partner IBM stated that it will use Stronghold USD to conduct pilot experiments to help banks and other financial institutions process payment services faster and more securely. For this reason, the stable currency is mainly aimed at enterprise-level users such as financial institutions, multinational and asset management companies, and individual investor channels may be opened in the future.

⑥USD Coin that Circle plans to issueRelated sites:

Issue status:On May 16, 2018, Cricle, a Boston-based bitcoin start-up company, announced that it will cooperate with Bitmain to launch a digital currency based on CENTER

company situation:Circle Internet Financial ltd. was established in 2013 and is a digital currency product development company; it has 7 million users and completed the acquisition of Poloniex, an American trading platform, earlier this year

Financing status:In May 2018, completed the E-round financing of US$110 million led by Bitmain; in addition, the previous rounds raised US$136 million, including IDG Capital, Goldman Sachs and Breyer Capital

Key members of the team:

Naeem Ishaq, CFO, former Square executive

Considering integrating USDC into its payment application and Circle Trade, but the specific launch time and related restrictions on individual and institutional users are still unknown

According to the currently published information, USDC emphasizes transaction compliance and will cooperate with qualified institutions; thus allowing USDC to operate completely under the US legal system and subject to the regulations of the CENTER network. In addition, USDC adopts the Full Reserve model, that is, the escrow reserve corresponds to the amount of US dollars, and it is guaranteed not to be overissued and the US dollar is withdrawn.

Most of these projects are in the early stage of development, the current user and market attention is not high, and the transaction liquidity on the chain is small; like the DGX created by DigixGobal, which is linked to 1g of gold, the market value and daily trading volume only reach the million-dollar level, while HelloGold’s The average daily trading volume of the token HGT is less than $10,000. However, compared to circulation, this kind of stable currency anchored to gold and other value-preserving bulk products is more inclined to be used as an asset to hedge risks and store value.

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Stable digital currency based on digital assets

Original image from: Cointelegraph

Official website:https://makerdao.com/

Issue status:Essentially speaking, it is based on cryptocurrencies with high currency volatility, and attempts to build digital currencies with relatively stable prices through over-collateralization and other models, thereby facilitating transactions. Among the stable currencies based on digital assets, the most typical example is the DAI issued by MakerDAO on Ethereum.

①DAI created by MakerDAOOfficial website:

Issue status:Issued by the Nordic company MakerDAO in December 2017, it is an ERC-20 standard digital currency that is priced against the US dollar

Financing status:MakerDAO received $12 million in financing led by Andreessen Horowitz in December last year, followed by Wyre Capital and Walden Bridge Capital

Already on-line platform:

HitBTC, Gate.io, YoBit, OasisDEX and other more than ten trading platforms are online, but more than half of the trading volume is concentrated in OasisDEX, a decentralized trading platform under MakerDAO

Circulation:

In addition to the over-collateralization mechanism, the Maker platform also uses a multi-layer mechanism including collateral realization, arbitrage mechanism, target price change feedback mechanism, and emergency global liquidation to maintain the relative stability of the DAI price and the US dollar. To put it simply, when the price of the mortgaged digital currency rises, the Keeper on the Maker platform earns profits through the sale and purchase of DAI, thereby maintaining the stability of the DAI price. When the price of collateral fluctuates beyond a certain range and other mechanisms of the system cannot stabilize the price of DAI, the emergency global liquidation mode will be activated to recover DAI and return the mortgaged digital currency to users, thereby maximizing the interests of currency holders.

Official website:http://cryptofresh.com/a/CNY；https://openledger.io/?r=by24seven#/market/USD_BTS

Issue status:At this stage, DAI only accepts ETH as collateral. In the next 6 months or more, the team will consider accepting more digital assets as collateral. Therefore, the current stability of DAI largely depends on the value of ETH. Given its over-collateralization rate of more than 300%, DAI is relatively successful in maintaining price stability; however, under such a high collateralization rate, there are not many users who are willing to pay three times the mortgage funds to obtain DAI with stable prices; in the long run Looking at it, this will undoubtedly bring certain restrictions to the market circulation of DAI.

②BitCNY and BitUSD with BTS as collateralOfficial website:

Issue status:Issued by the BitShares team in 2014, a digital currency issued through BTS mortgage

Already on-line platform:

BitShares Asset Exchange and OpenLedger DEX have both listed BitCNY and BitUSD, while CoinTiger has added support for BitCNY; more than 60% of the trading volume of BitCNY and BitUSD is concentrated on BitShares Asset Exchange

The principle of BitCNY and BitUSD is similar to that of DAI. Behind each BitCNY and BItUSD, there is a BTS mortgaged by the user with at least twice the value. In order to anchor the two to the RMB and the US dollar, the BTS system uses the mandatory liquidation set by the smart contract. And the mandatory liquidation mechanism to maintain its price stability.

Official website:https://havven.io/

Issue status:However, affected by the sharp fluctuations in the price of BitShares, BitCNY and BitUSD experienced continuous liquidation and liquidation in the early days of their launch. It was not until the BTS price volatility decreased that its price was relatively stable and the trading volume gradually increased. In addition, as mentioned above, if you want to reduce the risk of holding BitCNY and BitUSD, you need to set a higher mortgage multiple, but there are not many investors who are willing to mortgage stable coins with high multiples, which makes it difficult to increase the supply in the network and cannot cope with large-scale Applications.

③nUSD created by HavvenOfficial website:

Issue status:Launched in July 2018 by Havven, a blockchain start-up company based in Australia, the digital currency is mortgaged and issued through its cryptocurrency Havven

company situation:Established in 2017, Havven has completed a total of US$30.3 million in financing at the end of last year and in May of this year. Investors include Block Tower, GBIC, Youbi, etc.

Well-known consultants:

Matthew di Ferrante, security engineer at the Ethereum Foundation; Walter de Brouwer, founder of doc.ai and ex-Cambridge entrepreneur-in-residence

nUSD is the first Nomins (stable digital currency in the Havven system) launched by the decentralized payment network Havven. The price is priced against the US dollar and is based on the Ethereum blockchain. It will also be released on the EOS network by the end of this year. In addition, according to Havven's plan, the platform will release a variety of Nomins linked to global currencies by the end of the year, such as nEUR, nAUD, nYEN, and nKRW.

Official website:http://alchemint.io/#/home

Issue status:Havven uses a dual-token mechanism to create a stable currency. Its Nomins use Havven as a guarantee, and the latter can be used as collateral for Nomins issuance. The stability of Nomins is maintained by the Havven team's direct intervention in the market supply and the fixed price redemption collateral mechanism. However, as far as the current situation is concerned, there have been about five relatively large price fluctuations in the month since its issuance; in addition, half of the trading volume is concentrated on the trading pair with USDT.

④ Stablecoins ready to be launched with Alchemint Standards as collateralOfficial website:

The NEO digital currency that will be issued based on Alchemint Standards (SDS) and priced against legal tender

Financing status:

Visually speaking, Alchemint’s upcoming stablecoin is the fusion of Havven and MakerDAO. It uses a dual-token mechanism to allow users to over-mortgage their issued digital assets in exchange for stablecoins. It also sets mechanisms such as forced liquidation and liquidation. And by adjusting the rate of change of the target price to maintain the relative stability of the price.

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Stable digital currency without collateral

image description

Official website:https://www.basis.io/

Original image from: CointelegraphDeveloped by the PeerCoin community in 2014, Nubits, the first digital currency in the field to achieve price stability, belongs to this type; however, since March 2018, Nubits has been seriously de-anchored from the U.S. dollar, and the current price has fallen below $0.4. The Basis and Carbon that appeared later have not yet been released.

① Basis that will eventually be linked to CPI (launch time undecided)Official website:

Financing status:In April 2018, Intangible Labs, a blockchain startup that participated in the development of Basis, raised $125 million from 225 investors through the Concise Futures Token Agreement (SAFT); Investment in ZhenFund etc.

Key members of the team:

CEO Nader Al-Naji, co-founders Lawrence Diao and Josh Chen are former software engineers at Google and DE Shaw, a global investment and technology development firm

John B. Taylor, Institute for Advanced Study, Hoover Institution and former U.S. Treasury Undersecretary for International Affairs; Naval Ravikant, founder of AngelList and CoinList

Official website:https://www.carbon.money/

The earliest algorithmic bank idea came from Seignorage Shares proposed by Robert Sams in 2014. Its basic design idea is to guarantee the value of legal currency through elastic control of token supply. To put it simply, the system will design two types of tokens, stable currency and shares. When the price of the stablecoin is higher than the anchor price, the system will automatically issue additional tokens to lower the price; otherwise, the shares will be auctioned and the funds raised will be repurchased into the stablecoin, thereby raising the price of the currency.Basis, on the other hand, improves on the basis of Seignorage Shares, and introduces bonds in the repurchase and additional issuance links; the tokens generated during the additional issuance process are preferentially distributed to bond holders, and the benefits are paid at the same time. In addition, in order to prevent the system from falling into a death spiral due to deflation, Basis also designed a repayment period; that is, after the set time, the project will not fulfill its repayment obligations. According to the description of the project white paper, Basis will anchor the price of the US dollar in the short term, but the final value will be linked to the consumer price index (CPI) that holders use digital currency to purchase goods or services.

② Carbon that will eventually be linked to CPI (launch time to be determined)Official website:

Financing status:

Key members of the team:

Co-founder Connor Lin once worked at ConsenSys; Chief Marketing Officer David Segura once invested in the stable currency project Basis

The founder of Carbon said that the project was inspired by the mechanism currently used by the Federal Reserve, but this mechanism will be realized in a decentralized way. In the Carbon system, two tokens, Carbon stablecoin and Carbon Credits, will be generated; the price of the former will always be maintained at one dollar, and the demand will be adjusted according to its fluctuation during the circulation process.

Specifically, under the control of the algorithm, when the price of Carbon stablecoin is lower than $1, the system will hold a ranking, and users who are willing to give up the stablecoin will be able to exchange Carbon Credits; when the price rises and additional issuance is required, the newly created stablecoin Will be provided to Carbon Credits holders.