What if a stablecoin is hard-coded to eliminate volatility? Enter DJED, the project that's claiming to solve algorithmic stablecoins' longstanding issues.

is constantly growing. It is hard to keep up with what is happening in the world of digital currency.

ecosystem has significantly matured over the last few years. 

participants use stablecoins for everyday transactions because they allow seamless money transfer, regardless of the location of the sender and recipient. Many investors are looking to invest, and they want to know the best choice.

DJED is a promising project that could become a leader in its field. According to some, DJED is currently the most advanced 

in the crypto space as it ensures price stability through formal verification. The addition of DJED to the 

 is expected to significantly improve the 

available worldwide. More than 300 million people own cryptocurrencies, and over 200 crypto exchanges offer 6000 different types of cryptocurrencies.

The major announcement coming out of the 2021 Cardano Summit was the launch of a 

 named Djed. This stable coin is run transparently through the blockchain, where anyone can verify what is happening. A cryptocurrency tied to a stable asset is a stable coin, such as gold or the US dollar, and can simplify the exchange in a volatile market.

In this article, we'll talk about DJED, a new stablecoin, how it's different from other cryptocurrencies, and whether or not it is worth investing in.

The COTI (Currency of The Internet) payment solution provides high transaction throughput with low transaction fees. 

, is used to enable high-speed transactions. COTI will allow around 10,000 

, far more than VISA, which supports peak hour demand of 4,000 transactions per second.

Through a unique combination of distributed ledger technologies and traditional payment systems, COTI hopes to set up a next-generation decentralized payment system that is instant, secure, and cost-effective. 

 are two of the most pressing challenges in current blockchain technology that COTI addresses through its DAG model.

COTI stands out from other payment solutions by providing the following:

COTI enables merchants to accept payments quickly and at an affordable rate, directly through merchant-facing tools, without relying on financial intermediaries. The network is capable of processing 100,000 transactions per second, maintaining as much security and stability as traditional payment methods and blockchains. Furthermore, the platform utilizes the Trust Chain Algorithm to prevent user errors and fraud.

Scaling blockchain-based ledger protocols, like 

, without consuming more energy is challenging. To solve the problem of scalability, COTI uses DAGs. COTI's DAG is called the Cluster, with each transaction represented by a Trust Score.

Adding a token transaction to COTI's ledger requires linking it to two prior transactions with the same Trust Score threshold. The Trust Score correlates with the confirmation time of the transaction. Users with a high Trust Score get faster confirmation and more transaction throughput.

In addition to meeting consumer payment needs and market demand, COTI offers a comprehensive solution that addresses merchant and consumer needs. The main features of COTI are:

With DAGs, similar to tree structures, you can store more data and validate more transactions efficiently and simultaneously. A higher network utilization results in more scalable networks. By using a 

, users get instant and fee-free transaction processing, i.e., there is no need to wait for one transaction to finish before starting another.

The COTI proof-of-trust algorithm, which combines the PoW and Trust Chain algorithms, provides a practical, energy-efficient alternative to the 

problem by assigning Trust Scores to each network user. COTI intends to encourage good network behavior to reduce fees and raise service standards.

New transactions must link to the two previous ones, thus forming a chain called Trustchain. Using Trust Scores, the Trustchain algorithm determines the amount of proof-of-trust necessary to confirm a transaction. The system rewards users with a higher trust score with quicker confirmations.

The COTI MultiDAG on top of the Trustchain produces fiat-collateralized, crypto-collateralized, non-collateralized, and other 

. Companies can create their coins for trading on COTI's network. The companies can use dedicated coins to reward participants by offering coupons, discounts, etc.

are similar ecosystems. At the transaction layer, the ClusterID identifies one Cluster from another within the COTI MultiDAG. Each COTI MultiDAG cluster adheres to the same validation and 

, creating a decentralized crypto world with a wide range of tokens.

 are on-chain and decentralized, similar to Ethereum's smart contracts. Each step of smart execution is documented in a COTI MultiDAG cluster and validated by multiple 

 before receiving confirmation. Since the DAG is a block-less network, there is no 

, and the COTI smart contract operates at a low cost.

 account can process online and offline payments in crypto and fiat. It offers users the option of using credit cards and merchant-specific coinage. Additionally, users can earn interest on deposits and apply for business 

 payments, loyalty points, crypto-fiat purchases, and cashback rewards. Through COTI Pay, merchants can upgrade their payment infrastructure with less difficulty, eliminate intermediary costs, and expand their business opportunities.

Cryptocurrency volatility is a considerable obstacle to mass adoption. Since the value of cryptocurrency can fluctuate considerably in seconds, it is not suitable for everyday exchanges.

is the first to ensure price stabilization through formal verification. The term stablecoin refers to cryptocurrencies tied to fiat currencies such as the US dollar or Euro and commodities like gold and silver.

The Djed protocol is mathematically verifiable and does not require a bank like some other stablecoins. Due to the DJED 

contract, a smart contract is responsible for buying and selling DJED in the market to maintain a stable value.

 ensure price stabilization, thereby making the coin useful for 

. Thus, a smart contract will automatically issue more coins as the price increases. The smart contract buys more if the price falls, thereby helping push it back up. It keeps a reserve of base coins to ensure a stable price and minting and burning stablecoins and reserve coins.

DJED stablecoins are suitable for many purposes such as payments, lending, payroll, settlements, alternate banking, remittances, etc.

As an alternative banking method, this is beneficial to underbanked businesses that are unable to open bank accounts, thus, allowing them to secure assets. 

 give users complete control over their funds and prevent them from being affected by bank failures or limited bank hours.

The value of stablecoins is designed to be stable over time. Due to this feature, they are ideal safe-haven assets, unlike cryptocurrencies such as 

, whose prices fluctuate dramatically. People who use stablecoins to store value are not at the risk of losing their possessions, especially since they have complete authority over them.

Overseas workers who wish to send money home face challenges with cross-border payments and remittances because international 

fees are high. Solutions such as cryptocurrencies demonstrate the benefits of blockchain technology in remittance. Stablecoins, however, might reduce the cost even further due to their inherent price stability.

 with a unique mechanism that will maintain the algorithmic peg of DJED while providing an incentive to SHEN token holders in the long term.

By buying and selling SHEN, users are able to maintain the peg of DJED to USD while earning a share of transaction fees in the reserve pool. Since SHEN is a 

, holders can also profit from the short-mid term price fluctuations as an added incentive.

DJED utilizes this reserve to charge and collect base fees, which will be pooled for transactions facilitated by the stablecoin. SHEN holders then get a share of this transaction pool as an incentive for their participation in maintaining the stablecoin peg ratio.

SHEN has a minimum and maximum reserve ratio. This ratio turns off certain functions of the protocol when it is hit. When the reserve ratio hits its minimum level of 

 then the contract will prevent the removal of ADA funds from the contract by not allowing users to mint new DJED or burn SHEN. This helps to prevent peg manipulation of the stablecoin by only allowing users to either withdraw the underlying asset for DJED, or to add more liquidity to its reserves.

When the reserve ratio hits a maximum reserve ratio of

, the contract stops allowing SHEN to be minted until the ratio drops back below the threshold. This is created to help maintain incentives for Shen holders and not dilute the returns of each holder.

 with DJED. This includes minting fees, burning fees, operational fee, which are all charged in ADA.

Users will have to pay a fee when minting and burning either DJED or SHEN. Both types of fees will be collected in 

and sent to the reserve pool. Shen holders can redeem their rewards by burning their tokens.

On top of that, there will also be operational fees for minting and burning DJED (no operational fees for SHEN), which will also be paid in ADA and later converted into COTI before going into the COTI Treasury.

 is a pool where users can deposit COTI and be rewarded for their participation. The treasury works as a 

of 84% based on the deposit multiplier and the lock period.

Users can top-up active deposits with additional COTI at any time. Deposits have an adjustable risk factor (e.g. 1x, 2x, 8x) and the lock period (e.g. unlocked, 30, 120 days). The Treasury charges a 

 for all deposits and withdrawals along with a transaction fee that consists of: 

As mentioned above, fees collection from burning and minting DJED in the future will be directed to this treasury and distributed to COTI 

, potentially increasing the APY and incentivizing more users to join the treasury pool.

Curious about the difference between DJED and ADA? DJED is a stablecoin on the Cardano 

. They differ in several ways, such as the ledger type and their consensus mechanisms.

While Cardano is a distributed ledger, DJED employs a DAG-based ledger. A distributed ledger is a database accessed by multiple people and synchronized across various locations, institutions, and geographies.

Cardano uses the proof-of-stake blockchain technology, while DJED uses COTI's proof-of-truth algorithm, a combination of the PoW and Trust chain algorithms.

DJED is an algorithmic stablecoin protocol that acts as an autonomous bank to buy and sell stablecoins based on a price range set by a target price.

The DJED team consists of experts with decades of experience in the technology and cryptocurrency industry. Djed aims to offer various products and services to users, including a centralized exchange, a payment service, a debit card, and wallets.

To integrate DJED, COTI has partnered with various companies, including ADAX, Indigo, MeowSwap, DEX, and ErgoDEX. Using DJED as a currency is a low-risk investment opportunity and one that will help you achieve your financial goals.

In the future, DJED will be able to accept 30 fiat currencies by partnering with AdaPay, and its access will be straightforward. The official website has not revealed any details related to the release date. According to COTI's latest blog on development updates, DJED is in the implementation phase and has already set up the infrastructure necessary to remain competitive among algorithmic stablecoins.

Hundreds of cryptocurrencies exist today, and it can be a bit overwhelming to know which ones are worth investing in. Crypto space is a risky market to invest in, but it is possible to invest in crypto assets at a very low-risk level.

The DJED stablecoin ultimately provides a suitable example of this. DJED is an algorithmic stablecoin developed by Input-Output Hong Kong (developers of Cardano) and COTI Group. In the algorithmic design of DJED, smart contracts will maintain price stability, focusing on Decentralized Finance (DeFi) transactions.

Along with a mathematically verifiable protocol, it eliminates price volatility, requires no bank, and works as expected. These properties make it a highly marketable currency, which should see a growing number of users and investors as time goes on.

If you are currently looking for a new cryptocurrency to invest in, it is a great idea to research the different options and determine if a coin will be worth it. DJED is a great low-risk investment option.

Intermediate

DJED.jpg

What Is DJED: The Algorithmic Stablecoin Backed By SHEN and ADA

Keen on learning about the differences between USDT and FRAX? These are the best stablecoins that you can buy to avoid volatility or try your hand at staking.

Looking for a top stablecoins list? You’re in the right place. After the dramatic collapse of 

 (UST), investors are becoming increasingly skeptical when it comes to understanding the actual stability of stablecoins. From being backed by actual dollars in a bank account to relying on a decentralized protocol, stablecoins exist in various forms. This comprehensive  guide to the best stablecoins will explain what stablecoins are, the different types to look out for and what are some examples of the top stablecoin to consider buying. 

Stablecoins are cryptocurrencies that have their price pegged and are backed by a singular reserve or group of assets. These price stabilization reserves can range from fiat currencies, national currencies, algorithms or commodities

If you’re new to crypto, you might be wondering about the use cases of stablecoins. Their most common form of utility is as a medium of exchange. 

Standard coins and tokens can appear extremely volatile as their value can wildly fluctuate because of huge inflows and outflows of funds. This can be cumbersome if you’re looking to use your crypto as a medium of exchange. Thankfully, with stablecoins, the value of the assets can be preserved as they’re meant to maintain their dollar value. This makes it easy for investors and traders to on-ramp their fiat and convert it into crypto as the exchange can be made with minimal price volatility.

On top of being a solid medium of exchange, crypto enthusiasts also use stablecoins to participate in 

 (DeFi) projects that involve the lending or staking of stablecoins. Doing this provides investors with passive, low-risk yield as they provide extra liquidity on the platform. This ultimately makes staking or lending out stablecoins a viable option for investors during a period of high volatility and bearish sentiments.

Now that we’ve covered the basics of what stablecoins are and their various use cases, let’s move on to the different types of stablecoins in the crypto space.

What Are the Different Types of Stablecoins?

Fiat backed stablecoins are, as the name suggests, pegged to a fiat currency. A fiat currency is essentially not backed by a commodity and is issued by a government. Fiat backed stablecoins typically have a reserve of the equal amount of fiat currency to which they are pegged. For instance, USD Coin is a top stablecoin that is largely backed by U.S. dollar fiat currency. Fiat backed stablecoins can be used for transactions like other cryptocurrencies and are considered more reliable.

In essence, crypto backed stablecoins are stablecoins that are backed by a group of cryptocurrencies. By relying on another cryptocurrency as collateral, the average investor would certainly fear that the crypto backed stablecoin will be highly volatile. To relieve these worries, such crypto backed stablecoins are generally over-collateralized to make sure they maintain their value throughout periods of massive price fluctuations.

Unfortunately, UST’s implosion has smeared the reputation of the best algorithmic stablecoins despite solid examples like FRAX and DAI maintaining a solid track record. Also called non-collateralized stablecoins,

 do not have standard fiat or commodity collateral. These decentralized coins are made to help boost stability in market price without connecting a central authority. Algorithms include special stabilization measures, which are hardcoded on Ethereum smart contracts for the stablecoins. To combat periods of volatility, the supply of algorithmic stablecoins is highly responsive to market forces.

On a more technical level, an oracle contract is used to assist these algorithmic smart contracts in execution. These contracts help by retrieving pricing information for algorithmic stablecoins on other exchanges. Following this, the price periodically enters a rebasing contract to determine if supply should increase or decrease. The contract then analyzes the number of tokens to mint or burn from user wallets based on the information gathered. 

Some stablecoin teams have gone one step further to make their algorithmic stablecoins partially collateralized. For example, FRAX is partially collateralized by fiat backed stablecoin USDC and FXS, the Frax protocol’s governance token.

Like fiat backed stablecoins, commodity backed stablecoins are backed by external assets that are not cryptocurrencies. In this case, commodity backed stablecoins are pegged to precious metals like gold. While commodities also fluctuate in price, they tend to hold value better in times of economic inflation than other forms of assets.

Commodity backed stablecoins are useful for investing in assets that are not always easy to source in a nearby geographical location. For example, physically buying and storing gold can be expensive and inaccessible in many places. By purchasing commodity backed stablecoins, investors can gain access to a tokenized form of these rare metals.

In order to determine what are the best stablecoins, we must first understand what makes a good stablecoin. On a fundamental level, the best stablecoins must provide transparency in their holdings. Also, top stablecoins must have a high trading volume so they can act as a liquid medium of exchange. These two factors combined provide a base on which investors can trust in the stability of the stablecoin, knowing that the stablecoin is backed by a credible reserve of assets and that the stablecoin can be easily exchanged with others.

From UDSC to DAI, here are the best stablecoins to invest in and include as part of your portfolio. For reference, each entry on this stablecoin list includes trading volumes between the period of June 25 and July 25 of 2022.

If you’re a crypto veteran, it’s no surprise that 

 (USDT) tops our stablecoins list. Originally known as Realcoin, the Tether stablecoin was officially released in 2014 and was one of the earliest stablecoins to be created. The stablecoin is backed by multiple assets that include traditional currency and cash equivalents that range from bonds to commercial paper. While there have been rumors with how Tether isn’t fully backed, the team recently made the move to publish 

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.

 for how it works and what backs it is good. 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.

, which is composed of multiple 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 everyday.

This past month, 24-hour trading volume numbers ranged between $3.5 billion and $9.5 billion. For stablecoin investors looking to earn a safe return, they can visit staking and lending platforms to earn between 6% and 14% interest for loaning out their USDC.

Contrary to popular belief, Binance USD (BUSD) isn’t just your average stablecoin with Binance’s label slapped on for good measure. BUSD is the collaborative project between Binance and Paxos and is completely backed by U.S. dollars. These funds are also kept in Paxos-owned bank accounts in the U.S. Since everything is done by the book and is regularly audited, BUSD is one of the only few fiat backed stablecoins to be approved by Wall Street regulators. 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 because of its interest income potential. According to Binance, investors can earn up to 15% interest through lending out BUSD. This huge yield allows the stablecoin to pose a sizable threat to the likes of stablecoin giants like USDT and USDC.

 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 

 performs regular monthly audits to guarantee that TUSD is 100% collateralized. This makes it a solid centralized stablecoin to invest in if you’re keen on passively staking stablecoins that emphasize regulation above all else.

During the past month, 24-hour trading volume numbers ranged between about $45 million and $400 million. Yield-wise, investors can earn between 10% and 12.3% interest on their True USD tokens on some of the top lending platforms.

 stablecoin in 2017, when the mere idea of a crypto backed stablecoin proved risky and unrealistic. While DAI was originally created to provide a non-volatile lending asset for businesses and individuals, the Maker eventually gave governance of DAI to MakerDAO. To quell the fears of crypto backed stablecoin volatility, DAI is over-collateralized with the use of Collateralized Debt Position (CDP) smart contracts. These Maker Protocol smart contracts allow users to lock up their collateral assets like ETH in exchange for DAI. 

To crypto investors, DAI immediately stands out because it’s backed by crypto assets rather than fiat dollars. If there were a sudden shift in DAI's value, investors can easily convert their DAI tokens to coins like ETH or WBTC because of the CDP smart contracts in play. Even after ETH’s fall from $3,000 in the past few months, DAI has managed to maintain its peg because of its diversified reserves and over-collateralized nature. This makes it one of the best stablecoins in the market because DAI has shown its ability to withstand huge crashes 

For reference, DAI's 24-hour trading volume numbers this past month fluctuated between $100 million and $640 million.

As a key token in the Abracadabra Protocol, Magic Internet Money tokens are created when you borrow it against interest bearing tokens like 

. 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. Despite gaining a bad name as the go-to stablecoin for DeFi degens, MIM has managed to hold up well in recent times. This is largely thanks to its over-collateralized debt positions that are passively generating yield and help to defend MIM’s peg during volatile periods.

24-hour trading volume the past month was between $3 million and $8 million. While this might pale in comparison to some of the top stablecoins on this list, MIM remains one of the best stablecoins because of the Abracadabra Protocol. With enough tinkering, you can effectively lend MIM and borrow it at the same time, generating a loan that can pay for itself. For risk-seeking individuals willing to do the research, this is certainly a strategy worth exploring.

 is to provide an alternative to fiat backed stablecoins that are too centralized. RSV was developed and launched in 2019 by an entity called the Reserve Project. As one of the top crypto backed stablecoins, RSR uses baskets of contract-managed cryptocurrencies to maintain its peg. 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. It’s this focus on transparency, decentralization and multi-asset collateralization that makes RSV attractive to investors. 

The past month's 24-hour trading volume numbers ranged between $10 million and $60 million. Although the Reserve platform does not specify an interest rate investors can earn for lending, there is a page that provides a detailed explanation of how

Originally launched on the Waves blockchain in 2019,

 has had its fair share of shake ups, especially 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 handsomely rewarded with up to 15% APY yields.

Although this might set off Terra-like alarm bells, the team has numerous features in place to prevent a collapse. Firstly, the swapping protocol prevents unlimited minting of WAVES 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. Also, entering and exiting the WAVES ecosystem is made tougher as investors must first buy and stake NSBT tokens to access the lucrative 15% USDN yields on 

During the past month, 24-hour trading volume numbers were between $2 million and $11 million. Because of its decentralized nature, the USDN is one of the best stablecoins for those seeking yields similar to the good old days of Terra’s 

Although it’s one of the newer algorithmic stablecoins, 

 (USDD) has stirred up quite a storm. After the infamous UST crash,

 created this coin that retreaded 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 at a 1:1 ratio to the U.S. dollar. With over 50 million accounts already in existence, this coin is potentially shaping up to be one of the most popular stablecoins for investors as it slowly rolls out its mainnet launch plans.

In the past month, 24-hour trading volume numbers were between $30 million and $250 million. According to the creator, investors who stake on the platform may earn up to 30% interest. This ultimately makes it potentially one of the best stablecoins for generating passive earning as well.

FRAX initially made headlines in 2019 by being the first fractional algorithmic stablecoin in the world. FRAX maintains its peg by making use of two reserves: fiat-backed USDC and FXS, the Frax ecosystem’s native token. The ratio of USDC to FXS depends on the collateral ratio, which varies the amount of USDC and FXS needed to mint $1 worth of FRAX. This makes FRAX a partial algorithmic stablecoin since it has fiat backing on top of its algorithmic backing.

Interestingly, the Frax protocol owns close to 20% of CVX available tokens. This allows the team to direct Curve Finance’s liquidity towards their 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.

Within the past month, 24-hour trading volumes were between $5 million and $42 million. Although it may not be one of the best stablecoins for earning high interest rates, it can earn investors about 5% interest on average.

Fei protocol aims to maintain liquidity in a way that ETH and FEI trade similarly to ETH and USD. While it has a lower market cap than most of the top stablecoins on this list, 

 makes the cut because of its unique method of preventing depegging. Fei Protocol uses Protocol Controlled Value (PCV) instead of the Total Value Locked (TVL) model. With PCV, the Fei protocol retains the user-deposited funds permanently. This gives the protocol full authority to mint and burn FEI to maintain the $1 peg. To ease depegging fears, the protocol reweighs FEI at 4-hour intervals, with the minimum price difference below the fixed point being 0.5%. On top of using a PCV model, FEI also directly incentivizes use of it by rewarding minting and trading.

Within the last month, daily trading volume totals for FEI USD ranged between $1.1 million and $9.2 million.

Created by Paxos, PAX Gold is an ERC-20 token on the Ethereum chain that was originally

 in 2019. Because of the Paxos brand behind the token and its high transparency, PAXG has emerged to become one of the top commodity backed stablecoins. It also helps that the government monitors and authenticates each PAXG token.

 in its reserves for each token and it houses London Good Delivery gold bars. For investors looking to own a tokenized form of gold, PAXG offers a viable alternative.

The 24-hour trading volume numbers during the past month fluctuated up and down between $9 million and $44 million. This high amount of liquidity within the commodity backed stablecoin market makes it the best option.

To earn interest on any of the top stablecoins or cryptocurrencies, investors can use platforms like 

 for staking. On top of offering a competitive yield, Bybit offers the advantage of staking under flexible and fixed terms. This gives investors the freedom and flexibility to pick a staking period that suits their risk appetite. 

 and get started on your passive income journey today.

We hope our guide has helped you in deciding what the best stablecoins are and educated you on their differences. 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 assets and offer transparency when it comes to what they’re backed by. During bearish markets, we’re also likely to see more investors stake stablecoins to earn a constant yield while waiting out the negative sentiments.

Beginner

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12 Best Stablecoins To Invest In During Volatile Times

Ever heard of a pound sterling-backed stablecoin? Learn what is GBPT and how poundtoken gives investors direct access to a digitized form of GBP.

 are cryptocurrencies with prices pegged to asset classes such as fiat currency, crypto, or such commodities as precious or industrial metals. The objective of creating crypto pegged to another asset is to minimize price volatility, a key obstacle to the mass adoption of cryptocurrencies.

As a result, creating crypto linked to a relatively stable asset could help increase user confidence. Stablecoins are meant to drive the growth and adoption of cryptocurrencies and their underlying blockchain technology. 

This article introduces the GBPT, the first pound sterling–backed crypto. We'll look at how it works, its objectives and how it fares compared to other stablecoins. 

GBPT is a regulated-stablecoin cryptocurrency backed 100 percent by the Great British Pound Sterling (GBP) held in bank accounts. This means that GBPT, also known as “poundtoken,” can be redeemed one-for-one with the pound sterling.

The poundtoken was launched by the Isle of Man–based Blackfridge SC Ltd, a fully regulated fintech company backed by British financial regulations. The initial launch was on the Ethereum blockchain, but the team has plans to bridge to other blockchains. The new stablecoin can be bought and traded on Gate.io, Uniswap and Bittrex. Blackfridge is working on listing it on other exchanges as part of their road map.

With the collapse of the Terra UST stablecoin, many investors lost funds, which, understandably, spooked the crypto space and shook confidence in the supposedly “stable” stablecoins. Blackfridge aims to restore public confidence by assurances of a stablecoin backed by solid reserves of the almighty pound sterling. Many other stablecoins are not backed 100 percent by fiat currency. GBPT is also not a central bank digital currency (CBDC) issued as a digital version of a fiat currency that’s considered legal tender.

To further assure users, poundtoken has the distinct advantage of being audited by the reputable auditor 

. They provide monthly proof of reserves, meaning they have to show investors that each coin issued remains completely backed by GBP held in reserves. 

The GBP stablecoin was launched to offer a GBP-linked coin and thereby accelerate adoption among GBP holders. GBPT also makes it convenient for users to directly convert fiat GBP to cryptocurrency without the delays and fees associated with traditional money transfers.

While this is a general objective for all stablecoins, GBPT goes beyond this. But before we dive into details, first a little backstory.

In 2014, the first stablecoin, BitUSD, was released as a token on the BitShares blockchain. The pioneering project team saw a need to increase the mass adoption of cryptocurrencies. They created a digital asset, known as BTS, with its value pinned to the BitShares blockchain token. 

The supposedly volatility-proof BitUSD lost its peg to the dollar sometime in 2018 and never fully recovered (though it still lingers around). Since then, many stablecoins have launched into the crypto scene with fanfare, and fizzled out quietly shortly after. Terra UST (which managed to wipe out over $200 billion of investors' wealth) is the latest and largest in a long list of failed stablecoin projects. The lack of regulation, and the inability to ensure that the coins were fully backed by reserves, led to their ultimate demise.

The primary fallout of the massive UST crash was a strident call for increased regulation of the stablecoin crypto industry, especially to confirm reserves. Here’s where GBPT comes in. 

In light of the numerous failed stablecoin projects and calls for increased regulation, the project developers focused on compliance with strict Isle of Man and British financial rules while maintaining the main spirit of the stablecoin concept — increased usage through reduced volatility. 

To further reassure investors, KPMG audits the project and releases monthly proof of reserves as evidence that the 100 percent pound sterling–backing is still in place.

Established on the Ethereum blockchain, GBPT will offer real-time global settlements without regard to borders or working hours. Blockchain technology promotes the poundtoken’s functionality as a speedy, transparent, safe and borderless value transfer asset.

While stablecoins have been around for a while and are a relatively common digital asset, GBPT comes with a suite of features that offers unique customer benefits, making the project stand out.

In view of the recent crash of the Terra UST stablecoin, Blackfridge has committed to maintaining user confidence and peace of mind by registering with the Isle of Man's Financial Services Authority and ensuring monthly audits via the auditing firm, KPMG. KPMG's role is to confirm that GBPT is 100 percent backed by the GBP by issuing monthly proof-of-reserve statements. Such transparency is lacking in most other projects, which can leave investors guessing whether reserves really exist.

Unlike most stablecoins pegged to crypto or U.S. dollars, the GBPT is tied to the mighty pound sterling, which is a major world currency. GBP is one of the most traded currencies in the world. Every issued poundtoken is covered 100 percent by fiat GBP in bank reserves.

The GBPT and its parent company, Blackfridge, are under the regulation of the Isle of Man's Financial Services Authority. While the Isle of Man is a sovereign territory, its financial regulators are supported and licensed by the British financial regulatory regime. 

Poundtoken is built on the Ethereum blockchain and uses ERC20 smart contracts, ensuring that transactions are encrypted, immutable and secure.

Pitting this new stablecoin against the older and more established stablecoins will bring out many surprising facts. Let's take a look.

In the stablecoin corner of the wider crypto industry, 

, commonly known as Tether, is the biggest project. Pegged to the U.S. dollar, USDT has struggled against allegations that it has less fiat backing than it 

. It also lost its peg to the dollar, trading at less than a dollar for a period of time.

These incidents question the level of regulation over the most popular stablecoin. While Tether claims to be fully regulated, citing registration with FinCEN as proof, most industry experts disagree. FinCEN is not actively involved in ensuring that a company providing financial services adheres to a set of rules. GBPT, on the other hand, has to operate based on the rules set by regulatory authorities. 

Still, USDT has some similarities with GBPT in that they are both centralized. Each project is owned and managed by an entity rather than a community. 

Interestingly, the launch of the poundtoken trailed the announcement by Tether that it plans to launch a new stablecoin tied to the GBP. 

, or the USD coin, is the most widely used stablecoin, second to the USDT. Created in 2018 by the Centre Consortium (comprising Coinbase and Circle), the stablecoin 

. USDC is pegged to the U.S. dollar and must comply with audit and U.S. money transmission requirements. This has earned it a reputation as a more reliable and safe stablecoin, although not as widely used as USDT.

, is a fully collateralized stablecoin built on the TrustToken Platform and is backed by U.S. dollars. On the regulatory side, GBPT is in many ways similar to TUSD as they’re both subjected to periodic audits and compliant with state regulators. While GBPT is audited by KPMG, TUSD employs the  audit services of the firm Armanino LLP.

When it comes to decentralization, TUSD is similar to GPBT in not being decentralized and is firmly under the control of TrueCoin LLC, the company behind the TrustToken Platform. Additionally, TUSD is also fully backed by its equivalent U.S. dollar, with every TUSD token having its equivalent dollar value stored in the bank to back it.

, the poundtoken price as of today — July 22, 2022 — is $1.20 with a daily trading volume of $62,276.

GBPT is a stablecoin and, as such, isn’t designed to have investment value since it’s supposed to maintain a constant price. 

The main use cases for a stablecoin such as GBPT are as a store of value and a reliable medium for seamless exchange of value. The GBPT coin facilitates easy and fast borderless fund transfers. Other major cryptocurrencies, such as Bitcoin and Ethereum, have prices that vary widely from day to day, making them difficult to use as a stable medium of exchange. 

Another reason to invest in GBPT is to store your money in crypto without the risk of volatility. 

Using fiat or other cryptocurrencies, you can buy, sell and hold poundtoken through cryptocurrency exchanges. GBPT is available on only Gate.io, Bittrex and Uniswap. The project team is working to list it on several more exchanges in the near future. 

You can also buy poundtoken directly from their official 

1. Connect your business bank account and complete the KYC.

2. Deposit GBP and receive an equivalent amount of on-chain GBPT.

Poundtoken, or GBPT, is designed for stability, and to build confidence in the stablecoin market using strict regulatory policies and regular comprehensive audits. It aims to be a benchmark for stablecoins used seamlessly in the global payment system.

As a result, it serves as a stable store of value and medium of exchange while maintaining transparency, security and speedy transaction processing.

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GBP Stablecoin (GBPT): The First Pound Sterling–Backed Coin

Stablecoins like USDT, USDC, and BUSD are fiat-backed cryptocurrencies. A combined market cap of $60 billion proves that they are here to stay. But what makes them unique? Learn more.

are cryptocurrencies whose values are pegged to a stable asset, mostly fiat currencies. Tether (USDT), USD Coin (USDC) and Binance USD (BUSD) are the three most popular stablecoins with a combined 

 of $140 billion. Stablecoins allow faster, lower-cost and safer transactions without the limitations associated with traditional banking, such as location-based restrictions and lack of financial services during holidays.

The global cryptocurrency market is forecasted to rise to above 

, or about 40% the marketcap of gold, proving the popularity of cryptocurrencies worldwide.

Stablecoin is a type of cryptocurrency that’s more reliable and less volatile than its high-profile counterparts like Ethereum and Bitcoin, which means there’s more significant potential for safer investments.

But which stablecoin should you trade? How does stablecoin compare to fiat currencies? Below, you’ll learn everything about stablecoin supplies and how they differ from each other.

A stablecoin is a fiat-backed cryptocurrency that has its value associated with another asset class, like gold or fiat currencies, to keep the price stable.

, “True stablecoins are non-interest bearing coins designed to have stable value against a reference currency — say USD $1.”

Although mainstream crypto assets like Bitcoin are beneficial because you don’t need to trust an intermediary institution, they’re highly susceptible to price fluctuations.

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