What are 2 types of stablecoin?

[cryptoworld1]

Top 10 Stablecoins to Buy in 2023
Tether (USDT) One of the original stablecoins was called Tether. ...
USD Coin (USDC) ...
True USD (TUSD) ...
Binance USD (BUSD) ...
Dai (DAI) ...
Magic Internet Money (MIM) ...
Reserve Rights (RSV) ...
Neutrino USD (USDN)

[Brewmaster]

Two common types of stablecoins are:

1. Fiat-Collateralized Stablecoins: These are backed by traditional fiat currencies like the US Dollar, Euro, or other assets held in reserve. Each stablecoin issued is typically pegged to a specific amount of the fiat currency. Examples include Tether (USDT), USD Coin (USDC), and TrueUSD (TUSD).

2. Crypto-Collateralized Stablecoins:These stablecoins are backed by other cryptocurrencies or digital assets. The value is maintained by over-collateralizing the stablecoin with a reserve of cryptocurrencies, which acts as collateral. Examples include DAI, which is backed by a diversified portfolio of Ethereum-based assets.

[Z-tight]

The subject and content of your post isn't in harmony, anyway the user above me already gave you an answer to the question in your subject. I just want to add that with stablecoins you are not sure if they are fully backed as the issuers claim, and so many of them are just printed out of thin air; so if you want to use any kind of stable coin, it is better if it is for the short term.

[Peter90]

Two common types of stablecoins are:

1. Fiat-Collateralized Stablecoins: These are backed by traditional fiat currencies like the US Dollar, Euro, or other assets held in reserve. Each stablecoin issued is typically pegged to a specific amount of the fiat currency. Examples include Tether (USDT), USD Coin (USDC), and TrueUSD (TUSD).

2. Crypto-Collateralized Stablecoins:These stablecoins are backed by other cryptocurrencies or digital assets. The value is maintained by over-collateralizing the stablecoin with a reserve of cryptocurrencies, which acts as collateral. Examples include DAI, which is backed by a diversified portfolio of Ethereum-based assets.

3. Gold-Collateralized Stablecoins.

Examples include:
Kinesis, 
PAX Gold (PAXG)
Tether Gold (XAUT)
GoldCoin (GFC)
DigixGlobal (DGX)
Meld Gold by Algorand
Perth Mint Gold Token (PMGT)
AurusGOLD (AWG)
Cash Telex (CTLX)
CACHE Gold (CGT)
AABB Gold Token (AABBG)

[hugeblack]

We can classify stablecoins into several categories: centralized or decentralized, supported by or without a cash cover, or linked to gold/bitcoin/dollar/euro. All of these classifications can include many pairs of stablecoins.

3. Gold-Collateralized Stablecoins.

Examples include:
Kinesis, 
PAX Gold (PAXG)
Tether Gold (XAUT)
GoldCoin (GFC)
DigixGlobal (DGX)
Meld Gold by Algorand
Perth Mint Gold Token (PMGT)
AurusGOLD (AWG)
Cash Telex (CTLX)
CACHE Gold (CGT)
AABB Gold Token (AABBG)

In fact, there is no gold, but rather they are currencies supported by a financial cover, whether it is the dollar or the euro, or an attempt to be an asset like gold, but in reality there is no guarantee other than promises.
There were several projects based on gold, but most of them were not famous, and I think that one of the longest of these projects that is still working today is https://gold.storage/

[Peter90]

We can classify stablecoins into several categories: centralized or decentralized, supported by or without a cash cover, or linked to gold/bitcoin/dollar/euro. All of these classifications can include many pairs of stablecoins.

You are right, there are different criteria for classify stablecoins.
One criterium is, what are they backed/collateralized by, which is the criterium used by user Brewmaster, which I commented on.

In fact, there is no gold, but rather they are currencies supported by a financial cover, whether it is the dollar or the euro, or an attempt to be an asset like gold, but in reality there is no guarantee other than promises.

Well in some cased It's more than just promises: in some cases there is the certification of an auditing company, which means the auditing company put their good name in it, losing a worldwide reputation if they certify what is not true.


For example, this is the audit of the gold stocks of Kinesis conducted by Bureau Veritas, an internationally renowned auditing company founded in 1828.


Kinesis explains also How does an audit work:

"At a designated time and date, independent officers from Inspectorate International enter all of Kinesis’ global vaulting facilities and physically tally the quantity of gold and silver held.
Shortly thereafter, the inspectors checked the total against the quantity reported by Kinesis’ strategic partner, ABX, in the inventory report on a prior date. Therefore, the quantity of gold and silver held in our vaults is checked against the record of all KAU and KAG in circulation, stored on our blockchain.

As well as recording the quantity, the auditors assess the quality and weight of a random selection of gold and silver bars. For this purpose, the inspectors carry out tests to assess the weight and fineness of the gold and silver.
Additionally, the auditors assess whether or not the quality of the storage facility was satisfactory."

I think this is something more than just promises 

There were several projects based on gold, but most of them were not famous, and I think that one of the longest of these projects that is still working today is https://gold.storage/

This project is interesting. I'll look into it.
Thanks HB

[hugeblack]

I think this is something more than just promises 

They are still promises, if we take USDT as the largest stable currency and considering that the dollar is easy to audit compared to gold, even USDT does not guarantee that the currencies are pegged at a ratio of 1:1. On the contrary, in a question to the company, it acknowledged that it has a cover of less than 10% of USDT and this cover is in the form of Treasury bonds and some assets are quick to liquidate, while the rest is in the form of assets and fixed assets that are difficult to liquidate, and there is no guarantee for more than 90% of the currencies printed.
Therefore, if the currency is backed by gold, there is no guarantee that at the moment the currency is minted, an amount of gold will be created in their treasury.

In fact, it is difficult to audit even the percentage of expenses, as they are highly regulated financial bodies, and there are several auditing companies, let alone cryptocurrency services.

[Charles-Tim]

Binance USD (BUSD) ...

It is worth knowing that there is not stable coin called BUSD anymore. Since many months ago, it was said to be listed and the coin no more exists.

Also, you did not mention the types of stablecoins, you only mention 10 stable coins. There are 4 main types of stablecoins and they are:

• fiat-backed
• crypto-backed
• commodity-backed
• algorithmic

[Peter90]

They are still promises, if we take USDT as the largest stable currency and considering that the dollar is easy to audit compared to gold, even USDT does not guarantee that the currencies are pegged at a ratio of 1:1. On the contrary, in a question to the company, it acknowledged that it has a cover of less than 10% of USDT and this cover is in the form of Treasury bonds and some assets are quick to liquidate, while the rest is in the form of assets and fixed assets that are difficult to liquidate, and there is no guarantee for more than 90% of the currencies printed.
Therefore, if the currency is backed by gold, there is no guarantee that at the moment the currency is minted, an amount of gold will be created in their treasury.

No professional asks for that guarantee HB.
You will never do business in this world if you ask for that kind of guarantees.

Btw, how would such a guarantee look like HB?
Cameras?
"There is no guarantee that they haven't been hacked."
A third party - maybe the police themselves - checking 24 hours a day the process?
"There is no guarantee that they are not corrupt."

The request for guarantees can become a silly game...


I think you miss the point of audits: the point of audits is to avoid promises.
The point of independent* audits - which are very expensive! - is that clients of a company don't have to trust promises.

* = made by a third company

If you are right - they are still promises... so with or without audits... no difference - then clients of companies that make their assets audited are stupid.
For them - I'm talking about professional investors... money managers... institutions (both public and private ones)... investment firms... pension funds... - for entities like these audits are a reason to invest in the products of a company.
These kind of investors believe that the results of an independent, internationally renown auditing company with more than 100 years of history are more than just promises.

Think about it


About USDT: I agree 100% 
I opened a thread myself! in order to show that USDT is not backed by USD!

[hugeblack]

No professional asks for that guarantee HB.
You will never do business in this world if you ask for that kind of guarantees.

Yes, then you agree with me that stablecoins backed by the dollar require trust in those who issue them, and with proof that USDT is backed by less than 10%, trusting them with large amounts is considered a risk.

Regarding guarantee, there are other forms of collateral (other than $1:1 in their bank account), where there is DAI and some decentralized stablecoins, but all of them have a point of failure if they are attacked.

[Peter90]

Yes, then you agree with me that stablecoins backed by the dollar require trust in those who issue them, and with proof that USDT is backed by less than 10%, trusting them with large amounts is considered a risk.

100%! 

[Wiseman]

No professional asks for that guarantee HB.
You will never do business in this world if you ask for that kind of guarantees.

Yes, then you agree with me that stablecoins backed by the dollar require trust in those who issue them, and with proof that USDT is backed by less than 10%, trusting them with large amounts is considered a risk.

Regarding guarantee, there are other forms of collateral (other than $1:1 in their bank account), where there is DAI and some decentralized stablecoins, but all of them have a point of failure if they are attacked.

Those who use USDT have no options in a more stable token than this one, it has proven itself over time and at any hint of decline its rate will immediately stabilize, I do not think that we need to worry because the dollar itself is not backed by anything for a long time) and today is considered the most popular currency.

[Peter90]

Those who use USDT have no options in a more stable token than this one

Wiseman, this is the "stability" of the USD i.e. of USDT:




There are currencies which are more stable than the USD




Gold-pegged coins are more stable than USD-pegged coins.

I can see reasons why users prefer USDT to some gold-backed coin! (liquidity... fees...) but saying that there are no option in a more stable coin... that's simply not true.


Wiseman, even if you are mad at me I'm going to explain to you your misunderstanding: you think of stability in terms of USD, not in terms of purchasing power
You are entangled in a USD-centric world view.
Within this world view: Stability = USD, so a coin whose price is pegged to USD is by definition stable.
Instead: Stability of a coin = holding the same purchasing power over time

You: "Hey! This coin was worth 1$ 20 years ago and is worth 1$ today. Wonderful stablecoin. Very stable!"
Me: "Hey! With this coin I could buy 2 scoops of vanilla ice 20 years ago. Today I can buy only 1 scoop! What a shitty stablecoin..."
Who is right now?