Stablecoins: Are They Really Stable? Time As The Most Valuable Asset They Can Be Pegged To

As you may know, stablecoins are virtual assets that maintain their value by being pegged to less volatile assets such as euro, USD, metals, or other crypto. According to CMC, the total market cap of stablecoins is $186B that is even greater than the total reserves of the UK ($180B). There are 3 main types of stablecoins including fiat-based, crypto-collateralized, and non-collateralized stablecoins. 

The key mission of stablecoins is to provide a price stability for users transacting across coins as well as between fiat and digital currencies. The money in the reserve serves as collateral for stablecoins.

The definition is clear. However, have you ever asked yourself the following questions:

Would companies behind stablecoins be able to convert all these assets into fiat immediately if all holders decide to exit crypto?

Do the companies behind stablecoins really hold all the reserves they declare?

Why does a company such as Tether with >$80B market cap employ only 30 employees?

Is there a risk that your stablecoin may be the next Ponzi scheme?

These questions suggest that there is still a lot of uncertainty around stablecoins.  Are they stable for investors? The answer is not clear. 

There is new research by a leading Web 3.0 cybersecurity company analyzing the issues behind stablecoins and suggesting possible new risk-free stablecoin called ETD that would be linked to the most valuable and, at the same time, the least volatile asset – time (workday of blockchain security specialists). 

Interested in getting answers to the questions above and finding some insights into the new stablecoin? Read the research here.