A Stablecoin is a token whose price is linked to the value of another asset in the market. The most popular Stablecoins in the world of Cryptocurrencies are representations of currencies such as the Dollar, the Euro, or the Yuan on a blockchain.
These Crypto assets are backed either by funds deposited in a bank, or by smart contracts. Likewise, there are Stablecoins representative of precious metals such as gold and Cryptocurrencies such as Bitcoin (BTC).
In this article we will show you 4 reasons why you should use stablecoins to operate in the Crypto world and make transactions more secure.
- Using stablecoins as a store of value:
The use of Stablecoins is very convenient to protect the value of your investments in the short term.
Unlike Cryptocurrencies with volatile value, Stablecoins are not subject to high price fluctuations, so they are usually used as a safe haven of value for easy entry into trading platforms.
By selling your Cryptocurrencies and tokens for Stablecoins you can “freeze” (Maintain purchasing power) your funds when you need to protect yourself from volatility and maintain the expectation of reinvesting in Cryptocurrencies in the near future.
- Stablecoins usually offer good levels of liquidity:
The most popular Stablecoins on the Crypto market (such as USDT, USDC, PAX, and DAI) enjoy better liquidity than many other Crypto assets.
This encourages exchange users to buy and sell their coins for stablecoins (using them as intermediate assets) instead of making direct exchanges between the Cryptocurrency they own and the coin they want.
This is done for the purpose of speeding up your conversions, because its greater liquidity means less waiting time to make a “match”.
This speed is due to its relationship with fiat currencies such as the US dollar, which strengthens its confidence and makes it a very convenient unit of account.
Its use as a unit of account gives stablecoins a competitive advantage over currencies such as Bitcoin (BTC) and Ethereum (ETH), which also have good liquidity, but whose prices are affected by the volatility inherent to their speculative nature.
Click to Tweet: By converting your Cryptocurrencies and tokens to stablecoins you can “Freeze” (Maintain purchasing power) your funds when you need to protect yourself from volatility.
- You can guard your stablecoins:
Unlike currencies directly deposited on exchanges, stablecoins are not ultimately stored in a centralized database, but rather on blockchain networks.
Regardless of whether they are stablecoins backed by bank deposits, or collateralized by tokens in a smart contract, these stablecoins can be stored in personal wallets compatible with the blockchains that host them.
This gives you as a user the freedom to keep your own funds safe and even transfer them between exchanges and/or P2P markets.
- Integration of stablecoins on decentralized exchanges:
The storage of stablecoins in blockchain networks also gives them usability on platforms specially designed to use Cryptoactives without giving up their custody (Decentralized applications).
This opens the possibility of exchanging them in decentralized exchanges (DEX); Trading platforms built directly on a blockchain, within which you can operate with Cryptocurrencies and tokens without the need to keep funds deposited in them.
This is an advantage in terms of resistance to censorship, which makes stablecoins an interesting alternative, as currencies stored in centralized payment processors, banks and exchanges cannot be used for this type of trade.
Conclusion:
Stablecoins give you the opportunity to make transactions much more secure, since they provide you with support in matters of value. This way, you don’t have to worry about market fluctuations.
If you want to invest in stablecoins, it is important that you do so through a platform that guarantees the best protection standards for your assets and management fields. This way, Ccoins offers you everything you need to be successful in your transactions.
Get to know us and join the Crypto universe with Ccoins.
