CoinCarp Blog

  What Is a Stablecoin？ A stablecoin is a new type of cryptocurrency that offers price stability, fixed value, and is backed by a reserve asset. Generally, most cryptocurrencies are quite volatile, because they're decentralized and not related to any government or organizations and the prices depend on supply and demand in the market. In contrast, to realize the security and privacy of payments of cryptocurrencies, and volatility-free stable valuations, stablecoin is usually backed by fiat, commodity, crypto, or algorithmic (not backed). How Many Categories of Stablecoin? Fiat-Collateralized stablecoins: They are off-chain assets that are backed 1:1 by fiat currency. They can be traded on exchanges and are redeemable from the issuer. Some examples of Fiat-Collateralized stablecoins: TrueUSD (TUSD), USD Tether (USDT), USD Coin, Diem Commodity-Collateralized stablecoins: They are off-chain assets that are back by commodities such as oil and gold. They are redeemable for such (more or...

  Introduction Defi stands for Decentralized Finance, a financial application ecosystem built on a blockchain network. In other words, DeFi establishes an open-source and transparent financial system that provides financial services to everyone without central authorities. It creates entirely new financial markets, products, and services. More specifically, the traditional financial system is controlled by central authorities such as the government and banks. They control the flow of funds and provide most of the financial services. For example, money transfers, savings plans, insurance and the stock markets. The traditional financial system was built on the trust of investors. However, the centralized financial system (or CeFi for short) has its own risks, such as mismanagement, fraud and corruption. It has the potential to collapse from the center and it is quite expensive. The alternative is decentralized finance that does not have a central authority. They are open and trustwor...