Financial Sharing

Dai、GUSD、USDC、TUSD、USDT、Paxo

December 6, 2020

Bitcoin, Ethereum and other mainstream digital currencies are unstable currencies, and their value will change with the market fluctuation. In order to connect with the real world conveniently, encryption practitioners hope to create a kind of “stable currency”, that is, it has relatively stable value.

The first stable currency in the world was usdt issued by tether in 2014, which is also the top stable currency market. Tether claims that for every usdt issued, it deposits $1 into the bank to anchor the dollar and ensure stability. Of course, in recent years, a series of stable coins such as Dai, GUSD, usdc, tusd and Paxos have emerged.

At present, there are three realization forms of stable currency, which are legal reserve mortgage mode, digital asset mortgage mode and coinage right mode.

The mode of legal currency reserve Mortgage: the user holding stable currency is actually the receipt of issuing a letter to your company. The centralized issuing company will mortgage its own assets to issue stable currency. Each stable currency corresponds to its equivalent assets with the bank. The typical representative is usdt.

Digital asset mortgage mode: mortgage digital assets on the blockchain smart contract, so as to issue digital currency anchoring the price of French currency. In this mode, the collateral itself is the mainstream digital currency such as BTC and eth.

Seigniorage mode: different from the former two mortgage modes, the seigniorage mode is the model of algorithmic central bank. The central idea is to automatically adjust the supply and demand of tokens in the market through the algorithm, so as to stabilize the token price at a fixed ratio with the legal currency.

In addition to the familiar usdt, the stable currency Dai on makerdao is also a typical representative. There are two kinds of currencies on makerdao, one is the stable currency Dai, the other is the management currency maker. Dai is a digital currency supported by mortgage encrypted digital assets, and its price remains 1:1 stable with the US dollar. Maker is a smart contract platform on Ethereum, which supports and stabilizes the price of Dai through mortgage positions, automatic feedback mechanism and appropriate external incentives.

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