At the height of the Covid-19 pandemic, Bitcoin rose from $5,000 in March 2020 to $65,000 in April 2021 and ended up plunging by 50% - to $30,000 in June 2021. This short-term volatility makes Bitcoin and other cryptocurrencies ill-suited for everyday use!. As a result, Stablecoins were developed. But what are Stablecoins? Let’s have a look.
What are Stablecoins?
Stablecoins are cryptocurrencies that peg their market value to a currency like the U.S. dollar or to a commodity's price like gold. Stablecoins offer the best of both worlds-
the swift and secure cryptocurrency transactions and the volatility-free stable valuations of fiat currencies(a government-issued currency not backed by a physical commodity like gold or silver, but by the government that issued it).
Benefits of Stablecoins
Types of Stablecoins
1. Fiat-Collateralized Stablecoins
These stablecoins maintain a fiat currency reserve such as the U.S. dollar as collateral in order to issue a suitable amount of crypto coins. Fiat-Collateralized Stablecoins have the authority of the government and thus are highly stable. They require strong regulation and auditing to ensure adherence to the necessary compliance.
2. Crypto-Collateralized Stablecoins
These Stablecoins are backed by other cryptocurrencies. As the reserve cryptocurrency is prone to high volatility, the stablecoins are over-collateralized(a large number of cryptocurrency tokens is maintained as a reserve for issuing a lower number of stablecoins). On the plus side, they are not vulnerable to a single point of failure.
3. Non-Collateralized (Algorithmic) Stablecoins
These stablecoins don't use any reserve but a working mechanism like that of a central bank in order to retain a stable price. The non-collateralized stablecoins are backed by an algorithm to create & maintain currencies - completely dependent on-demand supply to keep the value of the currency constant.
Stablecoin Development Workflow
During this phase, the blockchain consultants will identify your requirements and decide upon the blockchain algorithms, hash values, etc.
White Paper Creation
A team of experts will help you create whitepapers that are not only easy to read but also technically thorough!. All the crucial details of the project will be covered and can be used for decision-making.
A complete design of your stablecoin is devised by the team of expert designers and passed on to the development team for further process.
Blockchain Architects and a stablecoin development team execute the plan of action involved in developing your stablecoin. The project roadmap is employed
during the development process.
Testing & Deployment
Once the stablecoin is completely developed, it undergoes rigorous quality checks and is deployed when it conforms to the stakeholder's expectations.
Marketing & Support
To make the stablecoin known in the crypto world, development tasks related to MLM and ICO platform development are initiated, along with continued support and maintenance.
How to Develop Stablecoins?
Stablecoins are developed by pegging assets like crypto, gold, fiat, and some other development processes. The major challenge during the development of stablecoins
is the need to hire a team of expert blockchain developers from a trustworthy Stablecoin Development Company in the Blockchain space.
Development of a stablecoin includes :
Looking for a trustworthy Stablecoin Development Company? We have your back. We at Clarisco Solutions offer the best stablecoin development services that too with utmost perfection. With in-depth knowledge of cutting-edge technologies and a team of expert developers, we are your partner in success. Contact us today!