Simply stated 2019 was a
stabelcoins year, so I thought it would be good to know more about them.
StableCoin is a cryptocurrency pegged to another asset, designed to minimize the volatility of the price of the stablecoin, relative to some "stable" asset or basket of assets.
IMPORTANCE OF STABLECOINSWithout both short-term and long-term stability, it is considered extremely risky for the mainstream public to adopt cryptocurrencies as a direct replacement for fiat or traditional assets. Larger mass adoption will always require some form of stability. From a consumer perspective, its risky and impractical to use cryptocurrencies for daily use. A volatile medium of exchange can compromise users' purchasing power.
Many people think about
stablecoins that they are the crypto equivalent of fiat currency because of
Tether (USDT) the first stablecoin which is pegged (1:1) to a dollar.
This is not true because
stablecoins can be pegged to a cryptocurrency, fiat money or to exchange-traded commodities (such as precious metals or industrial metals).
I have to mention that there are also
not backed stablecoins and I will explain it better later in the article.
Commodity-backedStablecoins backed by commodities such as precious metals (gold, silver, etc.) are much less likely to be inflated than fiat-backed stablecoins. It is harder to mine gold or silver than it is to "create money out of thin air." Holders of commodity-backed stablecoins can redeem them at the conversion rate to take possession of real assets. The cost of maintaining the stability of the stablecoin is the cost of storing and protecting the commodity backing.
The best example for commodity-backed stablecoin is
GOLD (token) from the
Digital GoldGOLD is an Ethereum-based ERC20 token, convenient and instant way to store, buy, sell or transfer investment-grade gold.
GOLD token is exactly what you need to purchase gold and store it digitally with complete anonymity and guaranteed protection of your assets from high volatility and loss of value. Each
GOLD token is 100% backed by physical gold stored in a secure vault. Amounts of physical gold stored can be
verified at any time. The
Digital Gold Marketplace guarantees
GOLD token's liquidity. An unlimited amount of
GOLD can be purchased/redeemed on the
Digital Gold Marketplace website instantly 24/7.
https://gold.storage/en/homeFIAT-backed This is the common form of stablecoins.
Fiat-backed stablecoin are fully backed by fiat money 1:1, meaning $1 of stablecoins is equivalent to $1 of fiat money. The idea is that their stablecoin is backed by real fiat in real bank accounts. This category of stablecoins is indeed the most simple but also the most centralized. The best example is of course
Tether (USDT) but today there are literally dozens of
Fiat Backed stablecoins on the cryptomarket. Almost every infrastructural blockchain have issued their own stabelcoins already.
Cryptocurrency-backedStablecoins issued with cryptocurrencies as collateral, conceptually similar to fiat-backed stablecoins. However, the significant difference between the two designs is that while fiat collateralization typically happens off the blockchain, the cryptocurrency or crypto asset used to back this type of stablecoins is done on the blockchain, using smart contracts in a more decentralized fashion. In many cases, these work by allowing users to take out a loan against a smart-contract via locking up collateral, making it more worthwhile to pay off their debt should the stablecoin ever decrease in value. To prevent sudden crashes, a user who takes out a loan may be liquidated by the smart contract should their collateral decrease too close to the value of their withdrawal.
A prominent example of a
crypto-backed stablecoin is
MAKERDAO (DAI), project that has 2 separate coins:
MKR &
DAI. We will focus on
DAI since it is a stablecoin-backed by other cryptocurrencies. Unlike other stablecoins,
DAI does not rely on a centralized entity or third party since it lives completely on the blockchain.
DAI is a decentralized, cryptocurrency-backed coin with a face value that is pegged to the US dollars.
ALL KINDS OF STABLECOINS 
https://hackernoon.com/2019-complete-stablecoin-guide-0n9es3zabI think that not many of you know that there are also
not backed stablecoins which are worth to be mention here.
NOT BACKED STABLECOINS - redeemable in currency, commodities, or fiat money are said to be backed, whereas those tied to an algorithm are referred to as
seigniorage-style (not backed).
Seigniorage-style coins - that utilize an algorithmically governed approach to expand and contract a stablecoin money supply, just like how a central bank prints or destroys money. As the total demand for the coins increases, new supply of stablecoins are created to reduce price back to stable levels. The main objective is to get the coins price as close as possible to USD $1.
A prominent example of a
seignorage-style coin is
BASIS.
Previously known as Basecoin,
Basis is a stablecoin that peg its value to the USD through algorithmic adjustments of the coins supply. Price stability is achieved through the monitoring of various external exchange rates that are verified by an oracle system. If Basis is trading above USD $1, new stablecoins are created and distributed. If, however, Basiscoin is trading for less than USD $1,
Base Bonds which is another separate currency are created and sold in an open auction to take coins out of circulation.
Hybrid StableCoin - is two or more of the crypto categories, (Fiat, Crypto, or Metal Collateralized and Algorithmic StableCoin Model) applied to one token.
Hybrid StableCoin Model holds value partly being both the asset and algorithmic modeled.
Here the most known
Hybrid StableCoins:
https://medium.com/@alyzesam/a-simple-understanding-to-hybrid-stablecoins-with-2019-complete-guide-2a9b55af1de2
https://gold.storage/en/homehttps://hackernoon.com/2019-complete-stablecoin-guide-0n9es3zabhttps://masterthecrypto.com/guide-to-stablecoin-types-of-stablecoins/https://en.wikipedia.org/wiki/Stablecoinhttps://medium.com/@alyzesam/a-simple-understanding-to-hybrid-stablecoins-with-2019-complete-guide-2a9b55af1de2https://bt.irlbtc.com/view/5218372.0