Freewallet welcomes TrueUSD, Digix, Paxos, and USDC to its Multiwallet Platform. This new additions join Tether and DAI on Freewallet’s burgeoning list of stablecoins.
What are stablecoins?
Stablecoins like TrueUSD, Digix, DAI, Paxos, USDC, and Tether belong to a category of cryptocurrency that is intrinsically linked to a form of real-world value. While these coins can be traded on the cryptomarket and offer the same advantages that many cryptocurrencies offer, they are each anchored by static material backing. The anchors ensure that stablecoins are relatively resistant to cryptomarket fluctuation. The real-world backing of the coin differs with each individual currency. At Freewallet, we now offer our users stablecoins with a variety of backing, including crypto-collateralized, fiat-collateralized, and metal-collateralized options./p>
How do stablecoins work?
Stablecoins work in much the same way that regular coins work, but they have backing that other coins don’t. With these coins there are two types of backing: asset-backing and algorithm-backing. Coins that have asset-backing operate in a similar manner to the US Dollar when it was backed by the gold standard. Each stablecoin is backed 1-to-1 by its individual asset, and when you purchase a coin its corresponding asset is moved into cold storage and left untouched until you redeem it.
The second type of stablecoin backing is via algorithm. Algorithm-backing is a way of producing static value by constantly synchronizing the supply of a coin with the demand for it as dictated by the market. At Freewallet we offer coins that are backed by gold (Digix), the US Dollar (TrueUSD, USDC, Paxos, and Tether), and the Ethereum blockchain (DAI).
Why are stablecoins driving the cryptoworld wild?
Looking at the cryptomarket in 2018, as we move towards 2019, a new front of significant activity has opened up centered around stablecoins and developing stablecoin projects. In a time of cryptomarket volatility many investors have moved their assets into stablecoins seeking safer harbors. Stablecoins offer a degree of liquidity and stability during a time when daily 10-15% price fluctuations of major coins have become commonplace.
In the midst of what many see as a chaotic and bearish market, stablecoins have emerged as bridges between the advantages offered by cryptocurrencies and the stability offered by more traditional assets. In accordance with market trends, we are happy to provide our users with a burgeoning list of stablecoin options with which they can maximize their portfolios.
TrueUSD is the first stablecoin from Trusttoken. Via smart contracts, Trusttoken connects real-world assets with the blockchain. Trusttoken has backed TrueUSD 1-for-1 with the US Dollar, and partnered with registered banks and fiduciaries to secure the token’s backing.
Digix is the premiere asset-tokenization company on the Ethereum blockchain. Every DGX token is backed by 1 gram of 99% gold bullion which is stored in a secure, independent vault by established precious metals dealers in Singapore.
Paxos is a firm aiming to modernize finance via digitization and thereby reduce many of the settlement risks that come with standard financial practices. Each PAX coin is tied to 1 US Dollar, and continuous auditing ensures that supply matches market demand at all times.
USDC is the product of CENTRE, a collaboration between Circle and Coinbase. CENTRE, an open source technology organization, will govern USDC and is committed to providing stability to the cryptoworld.
Freewallet is a digital currency ecosystem offering wallets with built-in exchange for web, iOS and Android devices. It features more than 25 cryptocurrencies including Bitcoin, Ethereum, Litecoin, Dogecoin, Monero, and Bytecoin. Freewallet was recently named the third most popular cryptocurrency wallet for Android, with over 3 million users worldwide.