Try Quests to earn cryptoStablecoin Pegs
How have USD-pegged stablecoins across different chains, and with different backing mechanisms, fared through the last 5 days? Compare volume, peg stability, and any other metrics you think are relevant, and present a dashboard the summarizes your findings and conclusions.
Introduction:
Stable coins are digital currencies that use a variety of methods to keep their value constant. They are digital currencies designed to bring price stability to digital currencies similar to what we see in strong Fiat currencies, while maintaining the security, speed, and low cost of virtual asset transactions.
Stable coins were originally created to minimize the impact of digital currency price fluctuations on transactions and to act as a bridge for mainstream financial and investment institutions; But now they are trying to make their way into decentralized finance (DFA) and ordinary banking, reducing their payment costs and reducing their pressure.
Stable coins are divided into several general categories based on how they work:
- Fiat-backed stable coins always have a value equal to their Fiat-backed units; In exchange for launching each new coin to the market, one unit of Fiat currency will be added to the treasury of this stable coin. For example USDC and USDT
- Digital Currency Backed Coins use over-the-counter loans to keep their value constant. For example DAI
- Algorithmic stable coins, as their name implies, use intelligent algorithms and contracts to protect price stability. These stable coins maintain their price levels with the policy of increasing or decreasing supply (when needed) and using market forces. For example UST
These two figures demonstrate the swap behavior of stablecoins on Ethereum blockchain. As shown in this figures, the USDC has the highest swap volume in both directions in comparison with other stablecoins.
On May 12, the highest volume in USD are swapped from other assets to USDC and it strongly demonstrate the panic behavior of crypto users in market downfall.
Also, the most popular pools that each stablecoin is swapped on them are shown in the donut figure.
As shown in this figure, the most popular pool is USDC-WETH LP and it covered 29.1% of swaps. In the next rank, the WETH-USDT LP stands with 21.7% share.
The first figure contains the Peg of prices for each stablecoin over the selected 5 days. As shown in this figure, the UST is lost its peg and its price dropped from 1$ since May 9 on 06:00. Also, it can be seen that, the peg of USDT deviated on May 12 06:00 but it recovered back unlike UST that lost its peg.
This investigation is done based on the following analysis:
- Peg of stablecoins
- Swap volume of stablecoins
- Most used swap pools by stablecoins
