Explain how stablecoins stay stable
How much to use crypto-backed stablecoins on overpaid loans to keep their value correct.
Crypto-secured stablecoins are covered by a basket with one or more other cryptocurrencies. As they are inherently volatile, these stablecoins are highly decentralized and require buyers to lock their collateral tokens in smart contracts, which will be liquidated if the collateral’s price drops too much. Collateral can be obtained by exchanging stablecoins. & Nbsp;
One of the most famous crypto-backed stablecoins is MakerDAO & rsquo; s DAI, pegged to $ 1. However, as MakerDAO learned on March 12, 2020 & ldquo; black swan & rdquo; Events where the value of ETH & rsquo; It’s halved in less than 24 hours after being overwhelmed by liquidations. It is critical that the system cope with extreme conditions & mdash; forced to make significant changes to its governance and auction management. That succeeded, and the market capitalization of stablecoins & rsquo; is over $ 4.8 billion at the time of this writing.
It’s getting competition this summer from Free TON, the fully decentralized blockchain project that powers the Telegram Open Network blockchain & rsquo; s operations after the messaging company it founded pulled out of litigation. & Nbsp;
Free TON plans to launch a stablecoin cousin for its TON Crystal token this summer. Liquidity of stablecoins & rsquo; is 100% backed by locked ether and offers potentially profitable liquidity providers. It will & ldquo; wide application for services with regular subscriptions and high-risk services, & rdquo; TON Labs, the core developer of the free TON project, said.