usdtWhat is it ，Take you into the deeper understanding of stablecoins

Unlike Bitcoin ，USDTThe purpose of waiting for stablecoins is to solve the problem of large fluctuations in cryptocurrency prices one 、What is a stablecoin Stable Coin （Stablecoin）It's a cryptocurrency ，Its design is to maintain price stability ，Usually with a stable asset or currency （Like US dollars 、EUR ）hook up ，To reduce market volatility

usdtWhat is it ？USDTAlso called teda ，It is a stablecoin ，Its value and fiat currency （Like US dollars ）hook up 。Its main function is to provide stable trading pairs within the cryptocurrency market ，Help traders reduce risk when market fluctuations 。Unlike Bitcoin ，USDTThe purpose of waiting for stablecoins is to solve the problem of large fluctuations in cryptocurrency prices

one 、What is a stablecoin

Stable Coin （Stablecoin）It's a cryptocurrency ，Its design is to maintain price stability ，Usually with a stable asset or currency （Like US dollars 、EUR ）hook up ，To reduce market volatility 。Stablecoins play an important role in the cryptocurrency market ，Can be used as a transaction 、Investment and Asset Resistance 。

two 、Types of stablecoins

1、Pegged stablecoin （Collateralized Stablecoins）：

The value of such stablecoins is composed of certain physical assets （Like US dollars 、gold ）or other cryptocurrency asset mortgage support 。The most common examples are USDT、USDC、TUSD，Each stablecoin issued is linked to the corresponding dollar-equivalent assets. 。The prices of these stablecoins are relatively stable ，However, it may still be affected by the issuer's credit risk 。

2、Algorithmic stablecoin （Algorithmic Stablecoins）：

The price stability of these stablecoins is achieved through smart contracts and algorithms to adjust supply 。The supply of algorithmic stablecoins will be adjusted according to changes in market demand ，To keep prices stable 。

Asset-based stablecoin （Asset-backed Stablecoins）：The value of such stablecoins is backed by actual physical assets ，Such as gold or other goods 。

three、usdtintroduce

Tether is an important part of the digital currency ecosystem ，It is also the world's first stablecoin 。USDTyes TetherThe company launched a stable value currency based on the US dollar Tether USD，1USDT=1Dollar 。TetherEnsure that its value remains tied to the US dollar 。according to TetherThe statement ，Whenever a new one is issued USDTToken time ，It allocates equal amounts of dollars into its reserves ，Thus ensuring USDTGet full support from cash and cash equivalents 。

USDTOriginally published on 2014Year ，At that time, it was named “Realcoin”，By Bitcoin Investors Brock Pierce、entrepreneur Reeve Collinsand software developers Craig SellersCoins launched together 。at first ，USDTIt is through OmniLayers are released in the Bitcoin protocol ，Later, it gradually moved to other blockchains 。 Early birth ，USDTPrices continue to fluctuate 。

But it's here 2019Since the beginning of the year ，The volatility of this stablecoin has dropped significantly 。The reason behind this is also due to the steady growth of trading volume and the overall development of the digital currency market 。Just like Ethereum will issue additional issuances in a timely manner according to the degree of network development ，USDTThe additional issuance is more due to market demand ，therefore TetherThe company will adjust according to market demand 。

Four 、The meaning of stablecoins

Cryptocurrency fluctuates sharply 、Famous for price fluctuations 。 Consider volatility ，Using cryptocurrencies to replace fiat currency transfer value is unrealistic 。

This is where stablecoins come in 。 As the name implies ，Stablecoin price remains unchanged or remains stable 。 Stablecoins are special ERC-20 Tokens 。 Its main purpose is to take advantage of the advantages of cryptocurrencies ，Eliminate its volatility 。

Stablecoins can maintain stable value ，Because of the support of other assets 。 For example ，Popular Stable Coin Tether (USDT) Pegged to the US dollar 。 Each USDT All have a real reserve of one dollar ，This means USDT The value is as stable as the US dollar 。 Stablecoins have become the lifeblood of the decentralized financial ecosystem ，Because its stability is crucial to the various functions of decentralized finance 。

five 、summary

all in all ，USDTStable coins are an important part of the cryptocurrency market ，Provide traders with stable trading pairs and asset hedging tools 。Through different types of stablecoins ，Market participants can choose stablecoins that suit their needs for trading and investment 。In the digital currency ecosystem ，The development of stablecoins will continue to promote the development of decentralized finance ，Increase market liquidity and stability 。Let us look forward to the more important role of stablecoins in future development 。