2018 brought investors frustration. The market collapsed by more than 80% almost put an end to many new and old projects. There were pessimistic opinions about the final collapse of the digital currency, but not from the developers. In place of high-yielding assets came the so-called steyblkoiny, promising investors price stability.
The first steyblkoiny appeared in 2015-2016, but the real boom occurred in the last 3 months of 2018. According to the analytical resource Diar, the turnover of the 4 main stabcocoins (USDC, TUCD, GUSD, PAX – all are in the TOP-50 by the level of capitalization) in November 2018 compared to September increased by 1032%, in general for 3 months turnover amounted to 5 billion dollars. United States.
What are steablocks
Cryptocurrency is an internal calculation unit for a startup (platform). Its price, expressed in Fiat money, is directly dependent on demand. Stablecoinov is different. This is a type of cryptocurrency, the price of which is rigidly fixed, and the coin itself has physical support. In its quality can be American, Japanese currencies, gold and even assets that comply with the norms of Sharia. One of the most well-known examples of steablokoin is Tether pegged to the US dollar, the price of which is always within $ 1. USA with slight variations.
The growth of turnovers in stablebinks in November, analysts attributed precisely to the fall of the market. In theory, investors could simply convert cryptocurrency to fiat money, which some traders who left the market for a long time did. Those who intend to remain in the market further, temporarily switched to the stablecoins, saving on commission (it is cheaper to buy the same Tether than to withdraw the PTS in USD and then start again).
In theory, such cryptocurrencies would have to eliminate the main problem of the market – huge volatility, becoming a “protective haven” for investors. The mechanism for maintaining prices at one fixed level is similar to the mechanism for managing the exchange rate by the Central Bank. If demand significantly exceeds supply, additional emission occurs (capitalization growth). If the offer knocks down the price, the developers buy back the excess.
In practice, things are a little different:
- There is no way to check the availability of collateral. This problem has already been encountered by Tether, who did not allow a third-party audit and could not prove the actual availability of the amount in US dollars, which would cover the entire capitalization of the coin. You can imagine what will happen to the market if it turns out that there is no coverage for the steakblocks, and price stability is a fiction created by manipulating numbers.
- It’s not clear where the deposit coverage came from. It is unlikely that developers, even in conjunction with investors, would be able to collect such money. One would assume that the collateral is the money for which the cryptocurrency was purchased. But then it is not clear what are the benefits of developers who should benefit from exchange rate fluctuations.
- The price stabilization mechanism has inconsistencies. In theory, we would have to see, in addition to the growth of capitalization, its decline as well, in fact not all coins have this decrease.
Stablecoins are an analogue of fiat money of the last century, when paper currency was provided with gold. It seems that the developers are looking for any ways to keep investors in the market by offering them new types of cryptocurrency products. There may be one goal here – making a profit, which means that the time when the whole bubble will burst is still ahead.