In two days and 15 hours, Ethereum will go from a proof-of-work (PoW) mechanism to an “eco-friendly” consensus mechanism, widely dubbed Ethereum Merge.
The long-awaited merger is essential because the Ethereum blockchain powers many decentralized applications (Daaps), non-fungible tokens (NFTs), metaverse, games and stablecoins. Furthermore, all stablecoins need a blockchain network to carry out their tasks.
Stablecoins are blockchain-based cryptographic tokens backed by fiat currency for transactions. Some stablecoins are also backed by physical gold. Stablecoins need a blockchain or similar distributed ledger (DLT) technology to record transactions. However, the choice of technology depends on the issuer of the stablecoins.
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For example, USDD, an algorithmic stablecoin on the TRON blockchain, does not work on the Ethereum blockchain. However, the Ethereum blockchain is the most popular choice for stablecoins and other crypto products such as NFT, DeFi, games, metaverse, etc.
Here are the 5 best stablecoins based on the Ethereum blockchain
According to crypto news aggregator Coinmarketcap, the top five Ethereum (ETH) blockchain-based cryptographic stablecoins based on market capitalization as of September 12 are Tether USDT, Circle’s USDC, Binance BUSD, DAI from Maker DAO and FRAX from Frax Finance.
Cable (USDT): USDT is the world’s first stablecoin, created in 2014. It was issued by Hong Kong-based iFinex, owner of the cryptocurrency exchange Bitfinex. Tether has assets of $ 66.4 billion as of June 30, 2022, according to certified statements by the auditing firm BDO Italia. USDT’s current market capitalization is around $ 69 billion.
USDC: USDC is issued by Circle and backed by short-term US Treasury bills. Auditing firm Grant Thornton LLP verifies documents and issues monthly certificates. USDC’s current market capitalization is around $ 51 billion. According to an audit report by Grant Thornton dated August 24, 2022, USDC has approximately $ 54 billion in assets, backed by US government cash and treasury instruments.
BUSD: BUSD is a stablecoin issued by Binance, the world’s largest cryptocurrency exchange, in partnership with New York-based cryptocurrency firm Paxos.
Binance revealed that BUSD is fully backed by cash and equivalent pools, owned and operated by Paxos and regulated by the New York State Department of Financial Services. BUSD has a market capitalization of approximately $ 20 billion.
HELP: DAI is a stablecoin issued by Maker DAO, a decentralized autonomous organization. DAI is not backed by traditional assets or US dollars. Instead, it is backed by a combination of Ethereum-based DeFi contracts, Ethereum tokens, and USDC. DAI currently has a market capitalization of approximately $ 6 billion.
DAO is an organization where token holders make decisions through a voting mechanism. There is no centralized control of an individual in a DAO. There is no centralized control of an individual in a DAO.
FRAX: It is an algorithmic fractional stablecoin issued by FRAX finance. FRAX is an open-source, decentralized, on-chain stablecoin on the Ethereum blockchain. It maintains its dollar peg by using collateral USDC: Its native FXS crypto token uses real-time market data using its algorithm. Its current market capitalization is approximately $ 1.4 billion.