“What are the most popular Stablecoins”? A question indeed worth asking as cryptocurrencies are notoriously volatile, which limits mainstream adoption, and Stablecoins are essentially the only exceptions as they are extremely stable.
But that stability was called into question when the third-largest stablecoin, TerraUSD (UST), abruptly “de-pegged” from the U.S. dollar in May, eventually plunging to less than a cent on the dollar and triggering the collapse of its sister token, LUNA. In this article, we will be finding out what the most popular stablecoins are.
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Most Popular Stablecoins Summary
| Stablecoins | Price | Market Cap | Volume(24h) | Circulating Supply |
|---|---|---|---|---|
| Tether (USDT) | $1.00 | $66,219,508,502 | $26,779,968,095 | 66,209,545,100 USDT |
| USD Coin (USDC) | $0.9999 | $44,583,728,249 | $2,663,019,314 | 44,584,944,687 USDC |
| Binance USD (BUSD) | $1.00 | $18,337,245,562 | $5,826,912,425 | 18,339,816,742 BUSD |
| True USD (TUSD) | $0.9994 | $754,052,833 | $24,938,632 | 754,419,653 TUSD |
| Dai (DAI) | $0.9998 | $5,855,703,952 | $186,722,183 | 5,856,979,711 DAI |
| Magic Internet Money (MIM) | $0.9973 | $1,927,073,334 | $424,702 | 1,933,352,207 MIM |
| Reserve Rights (RSV) | $0.9987 | $28,813,744 | $50,112 | 28,850,667 RSV |
| Neutrino USD (USDN) | $0.5409 | $369,470,581 | $626,336 | 680,266,294 USDN |
| Decentralized USD (USDD) | $0.6309 | Unknown | $352,769 | Unknown |
| Frax (FRAX) | Frax | $1,024,354,036 | $5,151,649 | 1,023,027,133 FRAX |
What are the Most Popular Stablecoins?
To determine which stablecoins are the best, we must first understand what makes a good stablecoin. Fundamentally, the best stablecoins must be transparent in their holdings. Top stablecoins must also have a high trading volume in order to function as a liquid medium of exchange.
These two factors, when combined, provide a foundation for investors to trust in the stability of the stablecoin, knowing that it is backed by a credible reserve of assets and that it can be easily exchanged with others. A comprehensive list of the most popular stablecoins is provided below.
Tether (USDT)
If you’re a crypto veteran, you’ll know that Tether (USDT) is at the top of our stablecoins list. Tether stablecoin, formerly known as Realcoin, was one of the first stablecoins to be created and was officially released in 2014. The stablecoin is backed by a variety of assets, including traditional currency and cash equivalents such as bonds and commercial paper. While there have been rumors about how Tether isn’t fully backed, the team recently made the move to publish quarterly attestations that detail what makes up the reserves.
In the past month, 24-hour trading volume ranged between $25 billion and $80 billion, making it one of the top stablecoins if you’re seeking a high-volume stablecoin. On some of the top sites for earning interest on crypto, investors can earn between 10% and 12.5% interest for Tether lending. Tether’s transparency about how it works and what powers it is commendable. Some investors have said that including more detailed reports would help, and Tether plans to release a full audit to satisfy curious potential investors later in 2022.
USD Coin (USDC)
USD Coin was created by Circle, an entity composed of several well-known figures in the crypto world. The coin launched in 2018 and became one of the top stablecoins because it offered an alternative to USDT. While Tether’s holdings remained a mystery at the time, USDC provided proof of its backing by assets derived from the U.S. dollar. This transparency and stability gained from its fiat backing led to USDC taking the number two spot when it comes to the amount of USDC being traded every day.
Binance USD (BUSD)
Contrary to popular belief, Binance USD (BUSD) isn’t just another stablecoin with the Binance logo slapped on top. BUSD is a collaborative project between Binance and Paxos and is completely backed by U.S. dollars. These funds are also held in bank accounts owned by Paxos in the United States. BUSD is one of the few fiat-backed stablecoins approved by Wall Street regulators because everything is done by the book and is regularly audited.
This combined with Binance’s active branding makes BUSD one of the best stablecoins to invest in. With a steady daily trading volume between $3.5 billion and $8.5 billion during the past month, BUSD is steadily becoming a force to be reckoned with in the stablecoin space.
Another reason why BUSD is one of the best stablecoins on this list is its potential for interest income. Binance claims that investors can earn up to 15% interest by lending out BUSD. This massive yield enables the stablecoin to pose a significant threat to stablecoin titans such as USDT and USDC.
True USD (TUSD)
True USD was founded by Danny An, Tory Reiss, Rafael Cosman, and Stephen Kade in 2018 and gained attention because of its reputation as the first stablecoin with real-time audits and on-chain proof of reserves. To ensure each and every TUSD token is fully backed at a 1:1 ratio by the U.S. dollar, accounting firm Cohen & Company performs regular monthly audits to guarantee that TUSD is 100% collateralized. The term “responsibility” refers to the act of determining whether or not a person is responsible for his or her own actions.
Dai (DAI)
When the idea of a crypto-backed stablecoin proved risky and unrealistic, the Maker Foundation created the DAI stablecoin in 2017. While DAI was initially designed to be a non-volatile lending asset for businesses and individuals, the Maker eventually delegated DAI governance to MakerDAO. To alleviate concerns about the volatility of crypto-backed stablecoins, DAI is over-collateralized using Collateralized Debt Position (CDP) smart contracts. Users can use these Maker Protocol smart contracts to lock up their collateral assets such as ETH in exchange for DAI.
DAI immediately stands out to crypto investors because it is backed by crypto assets rather than fiat dollars. Because of the CDP smart contracts in place, investors can easily convert their DAI tokens to coins such as ETH or WBTC if the value of DAI suddenly drops. Despite ETH’s recent drop from $3,000, DAI has managed to keep its peg due to its diverse reserves and over-collateralized nature. This makes it one of the best stablecoins on the market, as DAI has demonstrated its ability to withstand massive crashes.
Magic Internet Money (MIM)
The Internet of Magic When money tokens are borrowed against interest-bearing tokens such as YFI or CRV, they are created as key tokens in the Abracadabra Protocol. This transaction essentially lets you mint a liquid asset in exchange for locking up illiquid assets, which can result in more leverage as you swap MIM for USDT and repeat the process of exchanging them for more interest-bearing tokens.
MIM has held up well in recent times despite a bad reputation as the go-to stablecoin for DeFi degens. This is primarily due to its over-collateralized debt positions, which generate yield passively while also assisting in the defense of MIM’s peg during volatile periods.
The 24-hour trading volume in the previous month ranged between $3 million and $8 million. While this may appear insignificant in comparison to some of the top stablecoins on this list, MIM continues to be one of the best stablecoins thanks to the Abracadabra Protocol. You can effectively lend and borrow MIM at the same time with a little tinkering, resulting in a loan that pays for itself. For risk-taking individuals willing to do the research, this is a strategy worth investigating.
Reserve Rights (RSV)
One of the goals of Reserve Rights is to provide an alternative to overly centralized fiat-backed stablecoins. RSV was created and launched in 2019 by a company known as the Reserve Project. RSR, one of the most popular crypto-backed stablecoins, keeps its peg by utilizing contract-managed cryptocurrencies. As part of its future plans to become one of the biggest and best stablecoins, the team plans to eventually leverage more than 100 low-volatility assets to offer more stability to investors. Investors like RSV because it emphasizes transparency, decentralization, and multi-asset collateralization.
Neutrino USD (USDN)
Neutrino USD, which debuted on the Waves blockchain in 2019, has seen its fair share of upheaval, particularly during the UST implosion. As an algorithmic stablecoin, USDN is backed by WAVES and the U.S. dollar, and you can exchange $1 worth of USDN for $1 worth of WAVES. Investors are then encouraged to stake their USDN stablecoins to provide liquidity and are rewarded handsomely with APY yields of up to 15%.
Although this might set off Terra-like alarm bells, the team has numerous features in place to prevent a collapse. To begin with, the swapping protocol prohibits unlimited WAVES minting and instead limits it to the total amount of WAVES sent to the smart contract by users. This prevents an oversupply if there’s suddenly a rampant inflow of WAVES from short-selling. Furthermore, investors must first purchase and stake NSBT tokens in order to gain access to the lucrative 15% USDN yields on Waves.Exchange.
Decentralized USD (USDD)
Despite being one of the newer algorithmic stablecoins, Decentralized USD (USDD) has created quite a stir. After the infamous UST crash, Justin Sun created this coin that retreated to the same algorithmic ground while avoiding mechanisms that can contribute to a death spiral. The coin was launched on the TRON blockchain and is pegged to the US dollar at a 1:1 ratio. With over 50 million accounts already in place, this coin has the potential to become one of the most popular stablecoins for investors as it gradually implements its mainnet launch plans.
Frax (FRAX)
FRAX made headlines in 2019 when it became the world’s first fractional algorithmic stablecoin. FRAX maintains its peg by utilizing two reserves: fiat-backed USDC and FXS, the native token of the Frax ecosystem. The USDC/FXS ratio is determined by the collateral ratio, which varies the amount of USDC and FXS required to mint $1 worth of FRAX. Because it has fiat backing on top of its algorithmic backing, FRAX is a partial algorithmic stablecoin.
Interestingly, the Frax protocol owns close to 20% of CVX available tokens. This allows Curve Finance’s liquidity to be directed toward its own stablecoin pool of DAI, USDT, USDC, and FRAX. By joining hands with such established stablecoin players, FRAX manages to elevate its reputation as a stablecoin that’s able to defend its peg in times of high volatility.
What are the most popular Stablecoins: Conclusion
With our guide, we hope you decide what the best stablecoins are and which ones you’ll like to invest in. Stablecoins are not all linked to fiat currencies. As previously stated, the aforementioned stablecoins are also linked to precious metals, gold, and other cryptocurrencies.
The most popular stablecoins are likely to continue seeing favorable trading volume trends as more investors shift their interest to coins that are backed by some form of asset and offer transparency when it comes to what they’re backed by.
