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The A to Z of Stablecoins

A stablecoin is a token built on a blockchain network that is designed to minimize volatility past pegging to a more than stable asset. Stablecoins are tokens adult for this particular reason. Compared to other cryptocurrencies, stablecoins are stable in value while maintaining like decentralized features as cryptocurrencies. Benefits of this include being able to take reward of blockchain technology and peer-to-peer value transfer while not being exposed to the high price volatility of Bitcoin, Ether, or other cryptocurrencies. This makes them an ideal medium for value storage or transaction.

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Centralization runs deep in society in the form of corporations, businesses and governments. Not that they're bad, but blockchain technology can offer a viable structural alternative by creating a more transparent and accountable system. The idea of open-source decentralization is to redistribute ability and to create a off-white and trustless system across all industries. This technological quantum, therefore, brings lots of promise and hope for the future.

The inception of Bitcoin in 2009 has resulted in a revolution in the trading and payments industries. People have started to accept cryptocurrencies as a grade of payment and it's existence exchanged in big volumes. These can be used for global transactions, buying new assets, and at your nearby retail stores.

Fifty-fifty though many stores take Bitcoin and other tokens as a method of payment, information technology's rare to come across token holders utilize it in their daily transactions. Another argument might be that at that place aren't plenty shops that accept it. An often cited reason behind this is that it'southward not applied to use it as a unit of measurement of account. Stablecoins are tokens developed for this particular reason.  They are termed "stable" because they are pegged to the value of something else, such every bit precious metals or fiat currency.

To better understand stablecoins, it is important to first learn most toll volatility in cryptocurrency.

Volatility is a measure of how much the price of an nugget has moved up or down over time. At that place are many factors attributing to the volatile nature of Cryptocurrency. Firstly, Cryptocurrency is still at a very nascent stage compared to other investment tools, traditional currencies and fifty-fifty golden. Secondly, the cryptocurrency market thrives on speculation, traders bet that the prices would get upward or go down to make profits. These speculative bets can cause a sudden influx or a sudden efflux, leading to loftier volatility. Their highly speculative nature might exist an bonny feature for investors, but it also makes them difficult to use in payments and trade. Compared to other cryptocurrencies, stablecoins are stable in value while maintaining like decentralized features equally cryptocurrencies. This makes them an platonic medium for value storage or transaction.

What are Stablecoins?

A stablecoin is a token built on a blockchain network that is designed to minimize volatility past pegging to a more stable asset. Most commonly, they are backed by US dollars, only they can also exist backed by other fiat currencies, like euros or yuan, and even avails like gold, or other cryptocurrencies. Benefits of this include existence able to accept advantage of blockchain applied science and peer-to-peer value transfer while not existence exposed to the loftier cost volatility of Bitcoin, Ether, or other cryptocurrencies. Stablecoins are a relatively new kind of engineering science and each of them comes with different implementations, liquidity, risks, and acceptance.

Importance of Stablecoins

Without both short-term and long-term stability, it is considered extremely risky for the mainstream public to adopt cryptocurrencies every bit a straight replacement for fiat or traditional assets. Larger mass adoption will always require some grade of stability. From a consumer perspective, it'due south risky and impractical to use cryptocurrencies and tokens for daily utilize. A volatile medium of exchange tin can compromise users' purchasing ability.

That'south where stablecoins are the go-to. Stablecoins are the but class of tokens where you don't have to worry almost the instability and volatility of cryptocurrency prices. Stablecoins take an important office due to the post-obit factors:

1. Protection from (hyper)inflationary fiat economies
   Stablecoins have the potential to help people living in countries suffering from loftier inflation rates, which ultimately reduces their purchasing ability. This is usually a result of economic and political uncertainty. There are many examples throughout history where fiat money has significantly suffered from devaluation.
   In these countries, it is extremely difficult to movement their capital letter elsewhere since capital control laws are imposed past the government to forestall money from leaving the country. Converting their money in stablecoins will ensure that the value of their money is preserved, instead of keeping their coin in their national fiat currency which will further reduce their purchasing power. Stablecoins have the ability to globally assist the masses from the fallout of economic and political uncertainty.
2. Hedging Mechanism For Traders
   To hedge is to reduce the chance of adverse price movements in an investment or asset. Hedging is a strategy often used in the investment world to protect users' positions past reducing risks. Stablecoins are commonly used in the cryptocurrency market every bit a hedge against Bitcoin and other digital avails. Converting their holdings into stablecoins protects their value.

Types Of Stablecoins

There are several ways that the stability characteristic of stablecoins are designed. The two most mutual types are convertible and constructed stablecoins. The fundamental difference betwixt these two is how they are collateralised.

Convertible stablecoins

These are backed by assets that are held in a reserve, where the asset acts similar an IOU that is held by a centralized entity. The almost commonly used are fiat-backed stablecoins pegged to the US dollar like USDT or USDC.

Synthetic stablecoins

They aim to target a return to a reference sovereign currency like the USD, but they are non directly convertible for fiat currencies.

I way to achieve the target stability is by using crypto-collateralization (for example, DOC or RDOC), or using derivatives (eg XUSD). Another way is through a peg that is actively managed using an algorithmic budgetary policy or smart contract (eg Terra or Ampleforth). This is often used in conjunction with oracles that provide on-chain access to price feeds for fiat and blockchain asset pairs.

Stablecoins on RSK

Stablecoins play an of import role in the RSK ecosystem:

• They allow users to send, receive, or save the value in a stable form
• Offer a stable trading pair for swaps
• Stablecoins part as less volatile collateral for borrowing reducing the risk of a margin call
• Create more than stable yield generation and they're office of the foundation for RSK's DeFi on Bitcoin ecosystem.

Bitcoin-backed Stablecoins

Md

Dr. is short for Dollar on Chain. DOC is 100% collateralized with Bitcoin, with a 1:1 USD peg guaranteed past the smart contract. Dollar on Concatenation is the ideal stablecoin for daily transactions and users seeking to agree electric current value without leaving the benefits of bitcoin.

The Doc Token Smart Contract Accost: 0xE700691Da7B9851F2F35f8b8182C69C53ccad9DB

Features

• Cocky Contained in the Blockchain
  What makes Md unique is that the collateral is in a Smart Contract inside the blockchain, this means you don't need to trust a third political party decision-making the collateral.
• Perfect for Daily Transactions
  With third party not-custodial wallets you can instantly transport and receive DoC with no protocol fees.
• Personalized Wallet Storage
  Forget about giving up your private keys to a third party, Physician tokens are securely stored in your ain wallet.
• Benefits
  Users of the DOC tokens proceeds;
• Best Collateral
  Dollar On Chain doesn't rely on fiat. All the collateral is bitcoin.  The DoC'southward outstanding stability is guaranteed by the Smart Contract.
• Purchase or Mint
  You can purchase DoCs on a secondary market, just the Smart Contract allows you to mint your own DoCs avoiding unnecessary actress costs such every bit the spread.
• Use for Daily Transactions
  Physician is fast, secure and it doesn't have whatever protocol fees. That's why there is a growing ecosystem around it.

Where to Get Dr. Tokens?

You can get the DOC on Coin On Concatenation Stablecoin Protocol or read the Getting Started Guide.

RDOC

The RIF Dollar on Chain stablecoin, or RDOC for short, is ane of the master assets on the RIF On Concatenation DeFi platform. RIF on Chain is powered by Money on chain, a stablecoin and leveraged token protocol, which runs on RSK smart contracts.

RDOC is a stablecoin in the RSK ecosystem that's pegged 1:one to the Us Dollar and guaranteed by a smart contract.

RDOC is a crypto-collateralized stablecoin that uses the RIF token as collateral.

Unlike the bulk of other DeFi protocol stablecoins where users are required to provide collateral or a collateralized debt position to borrow funds, like the competing Ether-backed decentralized stablecoin DAI, RDOC can be acquired by platform users directly by spending RIF, which is a unique characteristic that some users may prefer.

The RSK Infrastructure Framework is creating the building blocks to construct a fully decentralized internet that enables decentralized sharing economies.

An of import distinction to keep in mind is that RBTC is the transactional token that facilitates operations on the RSK network, whereas the RIF Token allows any token holder to eat the services that are compatible with the RIF architecture.

Avoid crypto volatility using RDOC for payments, daily transactions, holding your savings, and acquiring RIF Services like identity, storage or communications.

RDOC smart contract token address: https://explorer.rsk.co/address/0x2d919f19d4892381d58edebeca66d5642cef1a1f

How to Get RDOC?

• Buy RDOC using a Decentralized Exchange
  You tin can buy RDOC tokens on a DEX, such as RSKSwap or TEX, and Liquality Bandy.
• Minting RDOC
  Yous tin can mint the tokens yourself using RIF every bit collateral. To mint RDOC, you lot need to connect to the RIF On Chain Platform. You tin can access the RIF On Concatenation Platform at https://rif.moneyonchain.com.

Note, earlier y'all tin interact with the ROC platform, you need to:

1. Set up an RSK network-compatible wallet like Corking Wallet, Wallet Connect, Metamask, or Liquality
2. Fund your wallet with RIF for minting, and RBTC to pay for gas fees.
3. Mint RDOC through the MINT/REDEEM button on the Commutation department of the RIF On Chain Platform, and yous'll demand to prepare the ALLOWANCE regarding the amount of funds in the wallet that you authorize to spend on minting. Annotation, the platform charges a fee of 0.1% of the value in RIF.
4. After yous ostend the mint, your RDOC balance will exist reflected within a few seconds and you have access to a USD pegged stablecoin on the RSK network

XUSD

BabelFish is the cross-chain protocol that aggregates stablecoin liquidity from multiple issuers and chains into one single token: XUSD.

XUSD is a USD-pegged stablecoin that acts as a decentralized aggregator and distributor of different stablecoins. XUSD tin be exchanged and redeemed 1:i with any of the underlying stablecoin tokens backing it using smart contracts.

BabelFish acts as a decentralized bank that has branches on different chains, accepting and distributing USD-pegged stablecoins. In this way, it acts as a "trustless stablecoin translation device" for supported stablecoins on different networks.

Why Utilise XUSD?

XUSD is a unique stablecoin: by acting as a decentralized aggregator and benefactor of different stablecoins, information technology offers iii advantages:

Reduces risk: Pooling liquidity from multiple networks reduces potential systemic risk across platforms and marketplaces if one stablecoin is compromised. Users of XUSD are also subject to less systemic chance because the Babelfish insurance fund is intended to provide a level of security beyond the assurances offered by its underlying stablecoins.

Provides deeper liquidity: The reward of this type of architecture is that it allows the fragmented liquidity pools formed by various stablecoins to bring together together as one larger and thus more liquid stablecoin pool. Deeper liquidity leads to lower slippage or failures in closing margin and lending positions. Deploying XUSD on top of the RSK network too attracts liquidity to the RSK ecosystem.

Provides flexibility: XUSD facilitates a i:ane exchange between different stablecoins and networks. It allows users to hands bridge multiple stablecoins from RSK, Ethereum, & Binance Smart Chain networks to XUSD, and in reverse.

XUSD currently serves the post-obit apply cases:

• International remittances and payments
• Stable collateral in RSKs DeFi on Bitcoin ecosystem
• Open up margin trades using XUSD or swap between XUSD and other tokens
• Lending to earn interest on XUSD, including the choice to earn involvement in RBTC and FISH tokens
• Utilise it to save equally a non-volatile store of value

Need help storing Stablecoins? Read How to Store Stablecoins on RSK

How to Go XUSD?

• On an Commutation
  ○ A Decentralized exchange similar RSKSwap, TEX, or Sovryn Swap
  ○ Employ a swap app to exchange your crypto for XUSD, like Liquality Swap.
  ○ Peer to peer through Defiant or another user like you.
• Use a Bridge
  Lastly, you can employ a cross-chain bridge. The BabelFish Bridge allows like shooting fish in a barrel and permissionless transfers of tokens from one chain to another through audited smart contracts.
  There are 3 networks included in the Cantankerous-Concatenation Bridge: RSK, Ethereum, and Binance Smart Chain. You tin use the BabelFish Span to cross funds in and out of RSK with the Ethereum and Binance Smart chains.
  The bridge allows users to transfer multiple stablecoins from Ethereum and BSC to RSK XUSD. The $XUSD tokens on RSK can be bridged into any of the supported stablecoins at a i:one ratio.

XUSD smart contract token accost: https://explorer.rsk.co/address/0xb5999795be0ebb5bab23144aa5fd6a02d080299f?__ctab=full general

RBRZ Tokens

RBRZ is the first Brazilian stablecoin in circulation. 1:1 pegged to the Brazilian Real. It will let Brazilians to directly ramp up investments in foreign exchanges and to trade a Brazilian Real (BRL) pegged stablecoin on a global scale. Information technology will permit sending and receiving BRL backed tokens safely and instantly, for a fraction of the toll of any other alternative.

Features

• Stability
  Cost stability will be pursued by market agents based on the reserves held by the Reserve Managers.
• Reserve
  The Reserve Managers keep full reserves. BRZ Tokens are ever fully backed.
• Multichains
  The BRZ is built-upward on height of Ethereum, Solana and Algorand blockchains.
• Security
  The BRZ Smart Contract is the public instrument used for issuing and burning tokens according to convertibility demands. Our crypto transactions are verified by Parsiq.
• Transparency
  The issuance of new tokens and the underlying reserves volition exist audited by a reputable third-party firm.
• Global Acceptance
  The BRZ Token can be traded on multiple platforms.

Why Use BRZ?

• Admission to International Platforms
  Brazilian users now tin enter international crypto markets without immediate exposure to Bitcoin or any other volatile cryptocurrency.
• Enter the Brazillian Marketplace
  International exchanges and platforms will exist able to enter the Brazilian market seamlessly. Acquire Brazilian customers with a frictionless solution.
• Trading Opportunity
  Users volition be able to trade 24h / 7 days.
• Hedge
  International investors with business in Brazil will have an easy alternative to hedge their holdings in Brazilian Reais.

How to Get RBRZ?

To become BRZ, use the RSKSwap

RBRZ Smart Contract Address: https://explorer.rsk.co/accost/0xe355c280131dfaf18bf1c3648aee3c396db6b5fd

Ethereum-based Stablecoins

The RSK ecosystem allows users an alternative way to transact with Ethereum-based stablecoins like USDT or DAI with much lower fees by converting them to stablecoins that move on the RSK network, including rUSDT, rDAI, and others.

rUSDT

rUSDT is the RSK token bridge "crossed token" counterpart to USDT, which is natively from ethereum.

Tether USDT converts greenbacks into digital currency, to anchor or tether the value to the price of national currencies like the US dollar, and the Euro.

Tether token is besides 1-to-ane pegged to the dollar, and so 1 USDT Token is always valued by Tether at one USD.

Read the Tether Whitepaper: https://tether.to/wp-content/uploads/2016/06/TetherWhitePaper.pdf

Ethereum/RSK Bridge that allows to motion ERC20 tokens betwixt ane chain and the other. The span contracts are upgradeable, this enables a smoother move to a more decentralized bridge in the time to come.

rUSDT smart contract token accost: https://explorer.rsk.co/address/0xef213441a85df4d7acbdae0cf78004e1e486bb96

How to Get rUSDT?

• Using a Bandy app;
  To become rUSDT, apply the RSKSwap
• Using the TokenBridge;
  You lot tin utilize the 'Token Bridge DApp' together with Bully Wallet or Metamask to movement tokens betwixt networks.
• Follow the Dapp guide for more details on how to utilise the token bridge.
• Find out How to Go Stablecoins on RSK

rDAI

rDAI is an culling to catechumen Dai and pay much cheaper transaction costs, around 0.15c per transaction which is approximately eighty times cheaper than transacting DAI compared to doing it over the Ethereum network.

Why use rDAI?

• Boycott High Fees on Ethereum
• Ethereum is experiencing extraordinarily high fees which go far impractical & expensive for most use cases.

How to Become rDAI?

Want to convert your DAI to rDAI?

• Cross DAI to rDAI using the
• Cross DAI to rDAI using or follow the Step past Pace Guide
• rDAI smart contract token address: https://explorer.rsk.co/address/0x6b1a73d547f4009a26b8485b63d7015d248ad406

> For a more detailed explanation about Stablecoins, the differences between stablecoins and other types of digital assets, stablecoins on Bitcoin, where to shop them, how to cross stablecoins using the RSK Token Bridge, and how blockchains achieve interoperability via cantankerous-chain bridges, check out The Consummate Guide to Stablecoins on the RSK Developers Portal!

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