USD coin (USDC): A stable asset for traders
Stability is the key in the world of cryptocurrency. For dealers who want to diversify their portfolios and their protection against market volatility, stable assets such as USDC are increasingly becoming a selection. In this article we will deal with the world of the USD coin (USDC) to examine your functions, advantages and why it is an attractive option for dealers.
What is USD coin (USDC)?
USD Coin (USDC) is a decentralized StableCoin project that started in 2018 by a consortium of cryptocurrency companies. It is on the value of the US dollar (1: 1) and works on the Ethereum blockchain, which makes it safer and more scalable than conventional Fiat currencies.
How does USD coin work?
USDC uses a proof-of-stake consensus algorithm, which is referred to as Proof of Stake (POS), which means that miners are no longer necessary to validate transactions. Instead, validators are rewarded with USDC token, based on the amount of participation that they keep in the network. This reduces the energy consumption and computing costs associated with the mining of conventional cryptocurrencies.
Why is USD coin stable?
One of the main reasons why dealers prefer USD coin is the ability to maintain stability against market fluctuations. Due to the influence of the US dollar, USDC eliminates the risk of price volatility and is therefore a more attractive option for retailers who want to protect themselves against market swings.
In addition, the fact that USDC is supported by real assets such as commercial banks and other stable coins offers an additional security level. This means that traders can feel confident in their investment because they know that their funds are protected and safe.
Advantages for dealers
So what makes the USD coin for dealers a great capital? Here are some of the advantages:
* Low volatility
: In contrast to conventional cryptocurrencies, in which considerable price fluctuations occur due to the market speculation, USDC is relatively stable.
* Liquidity : The Ethereum network offers excellent liquidity for USDC and simply makes it easier to buy and sell on large stock exchanges.
* Safety : As already mentioned, the support of the real assets adds an additional security level to USDC investments.
* Low fees : Compared to conventional investment products such as stocks or bonds, the trade in USDC requires considerably lower fees.
Examples in real world
In order to give you a better idea of how USD coin works in practice, you will find some examples here:
* Market Making : Hedge Fund and other market manufacturers use USDC as a stable good to secure themselves against potential losses. If the prices fall, you can simply buy the USDC token to block your profits.
* Trade : Dealers can use USDC to exchange various assets such as cryptocurrencies, raw materials or even traditional stocks.
* Ponzi -Schemata
: Due to its stability and low volatility, some people tried to create Ponzi schemes with USDC. However, these frauds are relatively rare and often exposed to it quickly.
Diploma
USD Coin (USDC) is an attractive stable good for retailers due to its unique functions and advantages. The USDC offers a safe port against market volatility and liquidity on large stock exchanges and has developed into a selection among investors to diversify their portfolios. With low fees and security assets that are supported by real assets, the USD coin offers the dealers an excellent opportunity to secure themselves against potential losses and achieve stable returns.
Liability exclusion
This article should provide general information about USD coin (USDC) and should not be taken into account as investment advice. All trading or investment decisions made on this information are the responsibility of the reader.