As noted by Coinbase`s analysts, the collapse of FTX has expanded the share of stablecoin’s dominance of the cryptocurrency market. The coins, pegged to the US dollar at a 1:1 ratio, inspire confidence with their stable exchange rate and ability to back up assets in crisis situations. Unsurprisingly, stablecoins have strengthened their influence several times over the last 3-4 years.
Stablecoins are designed to reduce the hazards of digital market volatility. They are therefore a suitable means for on-chain operations and capital storage. These virtual assets are useful for providers of funds and dealers as they use them to settle on trading platforms and accumulate their earnings from trading crypto assets, as well as part of their investment portfolio.
While USDT has earned the status of the very first and largest stablecoin in terms of market capitalization, there is a lot of criticism directed at it. USD Coin (USDC), which ranks number two in capitalization after USDT (Tether), looks more beneficial.
USDC is a cryptocurrency launched in September 2018. This centralized stablecoin has been created by the Centre consortium, which includes Circle and Coinbase. These significant and regulated financial institutions maintain high operational and legal standards and have gained the trust of market insiders. They have also established a transparent reporting system for USDC reserves, which is a basis for the trustability and credibility of the centralized stablecoin. The funds which are necessary to secure the USDC rate are held on the balance sheets of central US banks and are regularly verified by an independent auditor. Initially, the token functioned on the Ethereum blockchain (ERC-20 standard), but later it began to work on other ecosystems such as Algorand (ASA standard), Solana (SPL standard), etc. Ethereum tops the blockchain rankings in terms of the number of decentralized applications (DApps) deployed. However, the Solana network has so far managed to overtake ETH in terms of user activity, according to a report from the Nansen team. In the last few days, SOL rate is down 5 percent, while USDC is showing lower volatility and its value is down 1 percent, so you can take advantage of the momentum of SOL getting cheaper, which is evident in the long-run future, and balance your crypto portfolio by exchanging some of your USDC to SOL on Godex.io in a few clicks, safely and anonymously. The degree of diversification is up to everyone, as this solution has both pros and cons.
USDC is certainly a major competitor to Tether, but in contrast, there is an emphasis on increased security, transaction transparency, and lower volatility. Like USDT, USDC has maintained near-perfect price stability since its release (except during periods of extreme market volatility).
By all means, volatility is characteristic of the entire crypto market, but the ups and downs of the Safemoon token price still stood out (for example, in April 2022 the rate soared by more than 20,000% and then fell down). The project does not have working solutions, clearly defined objectives, or use cases. Because of that, many crypto enthusiasts are skeptical about the asset, but that doesn’t stop traders from making money on token price movements and tracking SafeMoon price predictions. The main thing is to be cautious and follow a strategy. And according to the experience that investors have gained over the years of cryptocurrencies, only those projects that have a specific purpose or competitive advantage remain on the market, and USDC is definitely one of them.
