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<ul><li>Terra’s stablecoin UST hit $10 billion earlier this week.</li><li>The platform’s other token, Luna, has also touched over $31 billion in market capitalization.</li><li>Terra has surpassed <keyword id="12297704" type="General" weightage="20" keywordseo="makerdao" source="Orion">MakerDAO</keyword>’s DAI token, its closet competitor, in terms of usage in the DeFi ecosystem.</li></ul>Stablecoins have sort of lost their charm over the past few years. But open source blockchain platform, Terra, might help change that, while also reinforcing the role these coins play in the growing decentralised finance (DeFi) ecosystem. <cmsannotation type="cmsannotation" annotationid="wazirx" comment="wazirx" text="wazirx">wazirx</cmsannotation> According to digital currency analysis website, <a href="https://www.coingecko.com/en">Coingecko</a>, the platform’s stablecoin — UST — hit $10 billion in market value this past Sunday, which is almost a 5 times surge in its valuation this year from around $200 million in January. The coin has also surpassed DAI, its closest competitor, and become the second largest decentralised stablecoin after Tether, which hosts the USDT token. <div type="Article" hostid="261" msid="88412814" title="Terra is the second-biggest DeFi player in the crypto market, but it may be overvalued" mstype="2" mssubtype="0"></div> DAI is hosted by MakerDao, a blockchain-based decentralised autonomous organisation (DAO). At the time of writing, DAI had a total market capitalisation of about $8.9 billion, while Terra’s UST was at around $10.1 billion, according to Coingecko’s listings. UST had actually surpassed DAI earlier this month, but it hadn’t hit the $10 billion mark until earlier this week. It’s a sign that the Terra blockchain has become an integral part of the growing DeFi ecosystem worldwide. The platform was launched in January 2018, about a year after MakerDAO’s DAI came into being. <cmsannotation type="cmsannotation" annotationid="UST token isn’t the only cryptocurrency that Terra can flaunt" comment="subhead" text="UST token isn’t the only cryptocurrency that Terra can flaunt">UST token isn’t the only cryptocurrency that Terra can flaunt</cmsannotation> While the stablecoin UST token has done well, <a href="https://www.businessinsider.in/investment/news/terra-is-the-second-biggest-defi-player-in-the-crypto-market-but-it-may-be-overvalued/articleshow/88412814.cms">Terra’s LUNA token</a> has been no slouch either. The token ranks at number nine on Coingecko’s lists and has a market capitalization of over $31 billion. In November, JPMorgan said that the total value locked (TVL) in the Ethereum-based DeFi ecosystem was close to $200 billion, up over ten times since 2020. The TVL in the Terra platform currently stands at $18 billion, according to blockchain research platform <a href="https://defillama.com/chain/Terra">DeFi Llama.</a> It’s popularity can be attributed to the fact that platforms like Terra help firms bypass the volatility of Ethereum and other cryptocurrencies, since their values are tied more closely to the US Dollar and hence don’t fluctuate as rapidly as Bitcoin or Ethereum. However, JPMorgan also warned that the growth of DeFi platforms “reflects a valuation effect” and may not be as impressive as it seems. “However this impressive growth in dollar terms mostly reflects a valuation effect, i.e. the mere fact that the Ethereum price has risen by 1,000% over the past year,” the bank <a href="https://markets.businessinsider.com/news/currencies/defi-growth-ethereum-mainstream-adoption-jpmorgan-decentralized-finance-2021-11">said</a>. SEE ALSO: <a href="https://www.businessinsider.in/cryptocurrency/news/end-of-year-brings-a-little-crypto-cheer/slidelist/88605842.cms">End of year brings a little crypto cheer</a> <a href="https://www.businessinsider.in/cryptocurrency/news/binance-coins-massive-1300-gain-in-2021-beat-both-bitcoin-and-ether-cementing-its-spot-as-the-worlds-3rd-biggest-crypto/articleshow/88597082.cms">Binance coin's massive 1,300% gain in 2021 beat both bitcoin and ether, cementing its spot as the world's 3rd-biggest crypto</a> <a href="https://www.businessinsider.in/cryptocurrency/news/six-reasons-why-indias-central-bank-believes-cryptocurrencies-threaten-financial-stability/articleshow/88588170.cms">Six reasons why India’s central bank believes cryptocurrencies threaten financial stability</a>

Terra’s stablecoin jumps 5x valuation in 2021 – with $18 billion locked in the DeFi ecosystem

<ul><li>The founder of <keyword id="12297704" type="General" weightage="20" keywordseo="makerdao" source="Orion">MakerDAO</keyword>, Rune Christensen, believes people should “be ready for the worst” when it comes to <keyword id="12297703" type="General" weightage="20" keywordseo="stablecoin-regulation" source="Orion">stablecoin regulation</keyword> in 2022.</li><li>According to him, ‘super countries’ like Canada, Australia, New Zealand, the UK and other climate resilient nations, will be more <keyword id="7616853" type="General" weightage="20" keywordseo="stablecoin" source="Orion">stablecoin</keyword> friendly than the US in the future.</li><li>Christensen recently dissolved the <keyword id="12297705" type="General" weightage="20" keywordseo="maker-foundation" source="Orion">Maker Foundation</keyword> and wants MakerDAO to champion for climate change.</li></ul> Rune Christensen, founder of MakerDAO, believes that stablecoins may be in for a rough year ahead. Marking his return to the MakerDAO community on Reddit, Christensen held an Ask Me Anything (<a href="https://www.reddit.com/r/MakerDAO/comments/q60iif/im_rune_christensen_cofounder_of_makerdao_and/">AMA</a>) session on the forum where he was asked about the future of stablecoin regulation in 2022. And, his response was to “be ready for the worst,” especially when it comes to the US. After dissolving the Maker Foundation, to make the <keyword id="12297706" type="General" weightage="20" keywordseo="dai-stablecoin" source="Orion">DAI stablecoin</keyword> ‘truly’ decentralised, Christensen is now <a href="https://forum.makerdao.com/t/the-case-for-clean-money/10684">advocating</a> for MakerDAO to solve the problem of climate change. According to him, there is potential for DAI to thrive in the regulatory environment of ‘super countries’ — Canada, UK, New Zealand, Australia and other nations that are climate resilient — rather than the US. <div type="image" title="climate resilence global_edited" msid="86965922" hostid="261" caption="&amp;lt;p&amp;gt;Global map showing the impact of climate change if the Earth gets warmer by four degrees Celsius&amp;lt;span&amp;gt;&amp;lt;/span&amp;gt;&amp;lt;/p&amp;gt;"></div> <div type="ExtQuote" text="“We need to set up legal core units and government relations core units for each of these places [super countries], and once we have those in place, we should be able to get a proper assessment of how safe our collateral would be.”" auname="MakerDAO founder Rune Christensen said during an AMA on MakerDAO’s subreddit"></div> According to him, once MakerDAO finds locations from where it starts to implement large scale real world projects, the company will be politically impossible to shut down — as long these bases are set within countries with “good political environments.” <cmsannotation type="cmsannotation" annotationid="wazirx" comment="wazirx" text="wazirx">wazirx</cmsannotation> <cmsannotation type="cmsannotation" annotationid="The regulatory landscape for stablecoins is ‘very hard to predict’" comment="subhead" text="The regulatory landscape for stablecoins is ‘very hard to predict’">The regulatory landscape for stablecoins is ‘very hard to predict’</cmsannotation> Stablecoins like Libra and Tether have caught the eye of global regulators primarily due to concerns over how the companies behind them manage the reserves that back them, especially since these stablecoins serve the purpose of a bridge between the world of cryptocurrencies and the traditional economy for many investors. <div type="ExtQuote" text="“It’s very hard to predict, especially because there are two aspects to that question, both what’s going to happen to stablecoins in general… and then what’s going to happen to decentralised stablecoins like DAI.”" auname="MakerDAO founder Rune Christensen said during an AMA on MakerDAO’s subreddit"></div> Most stablecoins, like <a href="https://www.businessinsider.in/cryptocurrency/news/tether-is-a-cryptocurrency-thats-not-volatile-and-pegged-against-the-us-dollar/articleshow/83604895.cms">Tether</a> and Libra, are ‘hard-pegged’ to the US dollar — they’re backed by the actual fiat currency. MakerDAO’s DAI stablecoin, on the other hand, is ‘soft-pegged’ to the US dollar. This means that while it maintains its value with respect to the fiat currency, it’s not actually backed by it. Instead, it’s backed by other cryptocurrencies. <cmsannotation type="cmsannotation" annotationid="The need for stablecoin regulation" comment="subhead" text="The need for stablecoin regulation">The need for stablecoin regulation</cmsannotation> Stablecoins are meant to offer ‘stability’ like their name suggests. The idea is that 1 token will be worth $1, a hundred tokens would be worth $100, and so on. Countries like the US, Japan, Singapore, China and the European Union (EU) are currently in the midst of figuring out how to protect investors from the risk that stablecoins present — the risk of not really being ‘stable’ at the end of the day. Tether, for instance, is not backed by actual US dollar reserves. Instead, it is backed by commercial paper — short term debt issued by companies to raise funds — most of which is speculated to be out of China. Even though the company behind the largest stablecoin on the market did come out to say that it doesn’t have any exposure to Evergrande — China’s real estate behemoth that is currently struggling to pay its $300 billion debt — there are still other Chinese companies that may be at risk due to the <a href="https://www.businessinsider.in/investment/news/evergrandes-impact-on-bitcoin-highlights-how-cryptocurrencies-still-have-growing-pains/articleshow/86422657.cms">ripple effect</a> put into motion by Evergrande’s downfall. And, that’s only the <a href="https://www.businessinsider.in/cryptocurrency/news/tether-is-a-cryptocurrency-thats-not-volatile-and-pegged-against-the-us-dollar/articleshow/83604895.cms">tip of the iceberg</a> when it comes to the reserves backing Tether. Last year in March, MakerDAO found itself in hot water as well when the price of Ether — the native token powering the Ethereum blockchain and the backbone of MakerDAO’s decentralised finance (DeFi) platform — went for a nosedive. It went from being worth $193 to $95 in less than 24 hours. The resulting chaos over transaction fees led to $8.32 million of Ether being liquidated off the platform for free. The event even got its own name — ‘<a href="https://medium.com/@whiterabbit_hq/black-thursday-for-makerdao-8-32-million-was-liquidated-for-0-dai-36b83cac56b6">Black Thursday</a>’. And, as things stand, there is very little stablecoin regulation on a national and global scale. <a href="https://forum.businessinsider.in/">For a more in-depth discussion, come on over to Business Insider Cryptosphere</a> — a forum where users can deep dive into all things crypto, engage in interesting discussions and stay ahead of the curve. SEE ALSO: <a href="https://www.businessinsider.in/cryptocurrency/news/bitcoin-crosses-57000-for-the-first-time-in-five-months-altcoins-continue-to-struggle/slidelist/86957497.cms">Bitcoin crosses $57,000 for the first time in five months — altcoins continue to struggle</a> <a href="https://www.businessinsider.in/business/startups/news/chingari-raises-19-million-in-crypto-tokens-to-launch-its-own-crypto-token/articleshow/86868155.cms">Chingari raises $19 million in crypto tokens to launch its own crypto token</a> <a href="https://www.businessinsider.in/cryptocurrency/news/nearly-half-the-world-will-be-using-cryptocurrencies-to-send-money-in-the-next-two-years-a-revolution-led-by-remittances/articleshow/86867756.cms">Capgemini says nearly half the world will be using cryptocurrencies to send money in the next two years — a revolution led by remittances</a>

‘We should be ready for the worst’ — MakerDAO founder is not optimistic about the stablecoin regulation in 2022

<ul class="summary-list"><li><keyword id="11931190" type="UNKNOWN" weightage="60" keywordseo="stablecoins" source="Orion">Stablecoins</keyword> are cryptocurrencies that are designed to maintain a stable price over time.</li><li>Stablecoins are often pegged to fiat currency, such as the US dollar, and backed by collateral. </li><li>People primarily use stablecoins on DeFi platforms and to hold money within the crypto ecosystem.</li></ul> <ul class="summary-list"></ul>While <a href="https://www.businessinsider.com/what-is-cryptocurrency" target="_blank" rel="noopener">cryptocurrencies</a> and the crypto ecosystem may present interesting and rewarding opportunities, many cryptocurrencies are extremely volatile. You might not want to spend a <a href="https://www.businessinsider.com/buy-bitcoin" target="_blank" rel="noopener">bitcoin</a> if you think its price could increase 10-fold within a year. Or you may not want to borrow a <keyword id="11892695" type="UNKNOWN" weightage="60" keywordseo="cryptocurrency" source="Orion">cryptocurrency</keyword> that's value could drop after you receive the funds. Additionally, it can be difficult and costly to move money between traditional financial systems and cryptocurrency networks. Stablecoins help crypto users address both of these concerns.<h2>What are stablecoins?</h2>As the name implies, stablecoins are cryptocurrencies that are designed to offer stability within a cryptocurrency system. They're often pegged (i.e., have a fixed exchange rate) to a fiat currency, such as the US dollar. "In an ecosystem like cryptocurrencies, where volatility is typically high, this is an important property," says Paul Brody, principal and global blockchain leader at <a href="https://blockchain.ey.com/" target="_blank" rel="noopener">Ernst &amp; Young</a>. "If you want to take advantage of <a href="https://www.businessinsider.com/what-is-blockchain" target="_blank" rel="noopener">blockchain technology</a> without exposing yourself to the volatility in crypto prices, this is the way to do it." For example, one USD Coin (USDC) is intended to always be worth $1. While the dollar's <a href="https://www.businessinsider.com/purchase-power" target="_blank" rel="noopener">purchasing power </a>could change over time, it's much less volatile than cryptocurrencies. There are also stablecoins that are pegged to a commodity, such as <a href="https://www.businessinsider.com/how-to-invest-in-gold" target="_blank" rel="noopener">gold</a> or oil, but fiat-pegged stablecoins are currently the most popular options. <h2>How do stablecoins work?</h2>A stablecoin's pegged value is what makes it useful within the world of crypto. But that's possible only if coin holders can be assured they'll be able to cash out their stablecoins. To ensure this can happen, stablecoin creators hold onto reserves of other currencies or assets. "This is called collateralization," explains Stephen Stonberg, CEO of <a href="https://bittrex.com/" target="_blank" rel="noopener">Bittrex Global</a>, a cryptocurrency trading platform. "Apart from being tied to another asset, collateralization also includes the buying and selling of affiliated assets through algorithmic mechanisms."For instance, a stablecoin issuer may promise to hold $1 in a bank account for each of the cryptocurrency coins it creates. As long as the collateral - or reserves - are available, coin holders know that they'll be able to exchange a coin for $1. However, there's a risk that the stablecoin issuer doesn't actually have enough reserves.Government agencies have discussed ways to regulate stablecoins, and have taken action against organizations that may have misrepresented their reserve holdings. And stablecoin issuers may share some details about what and where they're holding their reserves.In the news: The issuers of the <a href="https://markets.businessinsider.com/news/currencies/tether-stablecoin-crypto-circle-gemini-usd-coin-2021-07" target="_blank" rel="noopener">tether token</a> (USDT), one of the most widely used stablecoins, were fined $41 million in October 2021 for allegedly misrepresenting that they had held the proper amount of US dollars in reserve to back their tokens. Still, if you're considering buying stablecoins, a lack of proper reserves is one potential risk to be aware of. "In my view, the only really acceptable answer is with an independent audit," says Brody. "Not only do you need to know what assets are backing a particular token, if it's an asset-backed token, but you also need the assurance that those assets are not pledged against other liabilities." <h3>Two common approaches to stablecoin collateral </h3>Stablecoin issuers can choose how they want to hold the collateral for their stablecoins in reserves. The specifics vary depending on the stablecoin, but most fall into two categories:<ul><li>Off-chain or asset-backed collateral. Asset-backed stablecoins maintain reserves in non-blockchain assets. The safest options may be those that hold fiat currency in regulated accounts. But some may hold commodities, such as <a href="https://www.businessinsider.com/how-to-buy-gold" target="_blank" rel="noopener">gold</a>, in reserve. Or some keep part of the funds in fiat currencies and invest the rest of the collateral. "There's a bit more risk here because major price changes in those assets could threaten the ability of token-holders to cash out," says Brody. </li><li>On-chain or crypto-backed collateral. Crypto-backed stablecoins use cryptocurrencies as collateral. You can deposit and lock other cryptocurrencies to create these stablecoins, and they're generally over-collateralized to account for volatility. For instance, the stablecoin DAI is pegged to the USD (one DAI equals $1). But you could have to lock up $150 worth of <a href="https://www.businessinsider.com/what-is-ethereum" target="_blank" rel="noopener">ether</a> (ETH) to create $100 worth of DAI. </li></ul>"Another variation of stablecoins are on-shore and off-shore stablecoins," says Stonberg, a reference to whether the stablecoin issuers keep the reserves within our outside the US, which could impact regulatory oversight. "Ultimately, there will be a market for both types of stablecoins."Quick tip: While creating crypto-backed stablecoins may require over-collateralization, you can swap cryptocurrencies for stablecoins or <a href="https://www.businessinsider.com/how-to-buy-cryptocurrency" target="_blank" rel="noopener">buy stablecoins</a> through an exchange. Because new stablecoins aren't being created - they're only changing hands - you don't need to offer additional cryptos or payment. There's another type of stablecoin that doesn't have any collateral. Instead, they use automated algorithms to try to create or decrease supply and hold a steady price. However, these algorithmic or "seigniorage-style" stablecoins haven't caught on. <h2>How do people use stablecoins? </h2>Stablecoins are primarily used in two ways. First, you might want to keep money in the cryptocurrency system, but you don't think it makes sense to invest in bitcoin (or a different cryptocurrency) right now. Holding the funds in a stablecoin could limit your risk. It's a bit like keeping cash in a <a href="https://www.businessinsider.com/what-is-a-brokerage-account" target="_blank" rel="noopener">brokerage account</a> while waiting to make an investment.The other and perhaps more popular way that people use stablecoins is to participate in decentralized finance (DeFi) projects, such as crypto lending and borrowing platforms. Minimizing the volatility risk for users could make it easier to understand the cost (or profit) that can come from these transactions. "For most companies and individual users, the ability to use stablecoins to manage risk while accessing DeFi and other online services is going to be the key value proposition and it's certainly what our enterprise users are interested in," says Brody. <h2>The financial takeaway</h2>For individuals and institutions alike, stablecoins let people stay in the crypto world without the risk that's commonly associated with cryptocurrencies. In Stonberg's eyes, "what's unique and important about stablecoins is they represent the bridging of two worlds - cryptocurrencies and traditional finance." However, if you're considering buying stablecoins or using them to lend or borrow money through a DeFi platform, know that there's still risk involved. Asset-backed stablecoins might not actually hold enough assets to fully collateralize their outstanding coin balance. And even if they're over-collateralized, crypto-backed stablecoins could run into trouble if other cryptos experience major downswings.<a data-type="610ae71ab0b35f330c4d0734">Altcoins are the alternative digital currencies to bitcoin - here's what they are and how they work</a><a data-type="611446ec37043a480114bb24">What to know about non-fungible tokens (NFTs) - unique digital assets built on blockchain technology</a><a data-type="6140c7ba4dde6127641ef2ec">What to know about staking - the process of locking up crypto holdings to earn rewards and interest</a><a data-type="600f72e1fdb68e08982d5365">A bitcoin IRA lets you profit from the cryptocurrency's potential gains in a tax-advantaged way</a>

Stablecoins: What to know about the digital coins designed to ease volatility in crypto investing

<ul class="summary-list"><li>Regulators are training their sights on <keyword id="2762594" type="PERSON" weightage="60" keywordseo="tether">tether</keyword>, the biggest of the dollar-pegged <keyword id="2420795" type="PERSON" weightage="60" keywordseo="cryptocurrencies">cryptocurrencies</keyword> known as stablecoins. </li><li>But even as tether's legal troubles ratchet up, the <keyword id="7616853" type="UNKNOWN" weightage="60" keywordseo="Stablecoin">stablecoin</keyword> has already seen market share decline.</li><li>What tether does behind the scenes has become a central focus.</li></ul>In 2018, Jeff Bezos <a href="https://www.businessinsider.com/jeff-bezos-interview-axel-springer-ceo-amazon-trump-blue-origin-family-regulation-washington-post-2018-4">told Insider</a> that innovators "have to be willing to be misunderstood." So when Stuart Hoegner, the top lawyer at <a href="https://markets.businessinsider.com/currencies/usdt-usd">tether</a>, began an indignant blog <a href="https://stuarthoegner.medium.com/">post</a> in May citing Bezos, it suggested he saw his product as the unfairly maligned bleeding edge of a <keyword id="2721952" type="PERSON" weightage="60" keywordseo="crypto">crypto</keyword> revolution.Others aren't so sure. Regulators are training their sights on tether, the biggest of the dollar-pegged cryptocurrencies known as stablecoins. On Monday, reports circulated that the DOJ was eyeing a <a href="https://markets.businessinsider.com/news/currencies/tether-criminal-probe-usdt-stablecoin-investigation-federal-doj-crypto-2021-7">criminal bank fraud case</a> against tether execs' conduct years ago. The next day, further <a href="https://www.bloomberg.com/news/articles/2021-07-27/tether-facebook-coin-spur-worry-at-yellen-s-closed-door-meeting">reports</a> indicated a presidential committee led by Treasury Secretary Janet Yellen was homing in on tether, likening it to an unregulated money-market fund - the kind which caused <a href="https://www.wsj.com/articles/money-market-funds-buckled-in-two-crises-in-a-row-regulators-look-to-fix-them-again-11626687001">financial turmoil</a> during the 2008 crisis and again when COVID-19 rattled <keyword id="31671" type="CITY" weightage="100" keywordseo="markets">markets</keyword>.But even as tether's legal troubles reach an apex, the stablecoin has in some ways become less relevant. So far this year, tether's share of the overall stablecoin supply has tumbled from 75% to 57%, according to <a href="http://www.theblockcrypto.com/data/decentralized-finance/stablecoins/share-of-total-stablecoin-supply">data</a> from The Block. Behind the decline are new challengers, including <keyword id="18262" type="PERSON" weightage="60" keywordseo="circle">Circle</keyword>'s <keyword id="9825992" type="COMPANY" weightage="60" keywordseo="usd-coin">USD Coin</keyword>, <a href="https://markets.businessinsider.com/news/currencies/binance-ceo-regulatory-compliance-expertise-replacement-succession-changpeng-zhao-2021-7">Binance</a> USD, Gemini, and <a href="https://markets.businessinsider.com/news/currencies/crypto-ethereum-defi-yield-farming-mark-cuban-iron-titan-2021-07">DeFi</a>-focused Dai.The problem for tether is that the technological barriers around its stablecoin business are not very high.All the various US dollar-backed stablecoins "are not that different in terms of what they're representing," Denelle Dixon, CEO and executive director of the Stellar Development Foundation, told Insider. Stellar <a href="https://news.bitcoin.com/circle-launches-usd-coin-stellar-network/">hosts</a> USD Coin on its network."But the companies that support those tokens and what they do behind the scenes is really important," she added.And what tether does behind the scenes has become a central focus. Alongside the recent bank fraud allegations, past issues with its parent company's misconduct have dogged tether, leading New York state to <a href="https://ag.ny.gov/press-release/2021/attorney-general-james-ends-virtual-currency-trading-platform-bitfinexs-illegal">ban trading</a>. Moreover, there are two sets of complaints about the stablecoin itself: the quality of its reserves and transparency.First, regulators worry that tether's reserves - which in principle should back each tether with one dollar - could be of dubious quality. After the company released a reserves breakdown this year, JPMorgan <a href="https://www.ft.com/content/342966af-98dc-4b48-b997-38c00804270a">estimated</a> that its $30 billion in commercial paper, a cash-like type of short-term corporate debt, would make tether one of the world's biggest investors in the asset.Yet unlike <a href="https://am.jpmorgan.com/us/en/asset-management/adv/products/jpmorgan-prime-money-market-fund-morgan-4812a2702#/portfolio">other</a> massive commercial paper holders, tether does not disclose the make-up of what it owns. Hoegner <a href="https://www.youtube.com/watch?v=ZBEqyiO35cQ">told CNBC</a> his company's holdings included international paper - leading anchor Jim Cramer to <a href="https://www.youtube.com/watch?v=p1wzC8ozaDc">speculate</a> tether could be a "ticking time bomb" holding default-prone Chinese paper. A recent academic <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3888752">paper</a> suggested tether could be subject to bank runs, where the company is unable to meet a wave of dollar redemptions.Second, <a href="https://www.coindesk.com/tethers-report-card-offers-less-detail-than-rivals">some</a> think tether's disclosures, which were recently beefed up, are still insufficient. The company has not yet produced a full independent audit, though Hoegner told CNBC that one was "months away, not years." It has, however, produced an independent "<a href="https://tether.to/wp-content/uploads/2021/04/tether-assurance-mar-2021-2.pdf">attestation</a>" - essentially verification that tether's balance sheet is what the company says. Tether has <a href="https://stuarthoegner.medium.com/tether-is-setting-a-new-standard-for-transparency-and-responding-to-criticism-that-is-fc130e08319b">disputed or denied</a> the accusations against it. It says its commercial-paper holdings are highly rated, it has plenty of cash to cover redemptions, and its disclosure efforts are setting a "new industry standard for transparency." "It's a classic entrepreneur's dilemma," Sadie Raney, CEO of crypto hedge fund Strix Leviathan, told Insider. Firms operating in scantily regulated industries, like tether, must choose whether to plow ahead and risk blowback or take it slow and give up market share, she said.For Raney, who also co-founded the SEC-registered crypto robo-advisor Makara, using tether is too risky when her business relies on a government green light. "If we utilize a stablecoin, we do not use tether, [although] we have in the past," said Raney, whose company now uses Gemini. "The regulatory uncertainty with tether was what kept us from continuing to use it."Not everyone is deterred, though. Valkyrie CIO Steven McClurg told Insider that tether's public attestation helped soothe some of his prior fears, saying its publication has been "really good for the industry.""I don't think there are really any concerns anymore," he added.

Tether was once the stablecoin king. Now its dominance is threatened by newcomers and legal uncertainty.

<ul class="summary-list"><li>Alameda Research liquidated $1.7 million worth of cryptocurrencies over the past 24 hours. </li><li>Data showed that wallets associated with Alameda unloaded Ethereum-based tokens, which were later swapped for bitcoin.</li></ul>Alameda Research sold roughly $1.7 million worth of cryptocurrencies in the past 24-hours amid bankruptcy proceedings for Sam Bankman-Fried's collapsed empire.The firm, which served as a crypto hedge fund, sold mostly Ethereum-based tokens including curve, ether, dai and USD Coin. The coins were consolidated into two wallets before being sold for the stablecoin Tether and ultimately traded for bitcoin, according to data from Arkham Intelligence cited by <a href="https://www.coindesk.com/markets/2022/12/29/alameda-research-liquidated-ether-based-token-holdings-for-bitcoin-in-past-24-hours-on-chain-data-shows/" target="_blank" rel="noopener">CoinDesk</a>. <a href="https://twitter.com/ArkhamIntel/status/1608204990581202946" target="_blank" rel="noopener">Arkham said in a Twitter thread</a> that wallets linked to Alameda Research were dormant up until Wednesday, with the last prior transaction occurring on December 1. They began trading again on Wednesday and sent the cryptos to mixing services to swap the cryptos."If this was a rogue employee or some kind of breach, it was rather extensive," Arkham tweeted.The sales come as creditors, customers and suppliers of Bankman-Fried's businesses jockey to be first in line to be paid out in bankruptcy. Alameda Research currently holds $112 million worth of cryptocurrencies, CoinDesk says, a decline from $140 million in holdings in November. Meanwhile, Bankman-Fried is under house arrest in California after being charged with fraud over mishandling client funds in conjunction with the collapse of FTX. He is slated to appear in a New York federal court on January 3 and has denied criminal liability since stepping down as CEO of FTX last month.

Sam Bankman-Fried's Alameda Research sells $1.7 million in crypto amid bankruptcy and still holds over $112 million in tokens

<ul><li>A principal-agent problem is the conflict between a person or group and the representative authorized.</li><li>In DAOs, the decision-making power lies with the group instead of a central authority.</li><li>DAOs can be formed for any purpose be it raising funds for a war-torn country or pooling funds to invest in a project.</li><li>DAOs work for the benefit of the investors and not an ‘agent’.</li></ul>Many young adults who have just started looking at investments don't take the time to understand how to invest wisely. This is often because their focus is tangible goals like buying a car or a holiday abroad which is all here and now, not the future. Hence whatever investments they make just to save taxes are mostly uninformed choices either on their own or through investment advisors where their interests are not kept at the forefront. A testament to this is a recent case of front-running at a popular mutual fund house where the fund managers had a substantially higher income than their disclosed sources. As the mutual fund industry is highly regulated, this didn't take much time to come out in the open but unfortunately, the loss of income and trust doesn’t come back so soon. <div type="image" title="Rajagopal Menon, WazirX" msid="92412345" hostid="261" sizebytes="27762" caption="&amp;lt;p&amp;gt;Rajagopal Menon, WazirX&amp;lt;/p&amp;gt;"></div> This incident brings us to a classic case of a principal-agent dilemma. Investopedia defines the principal-agent problem as a conflict in priorities between a person or group and the representative authorized to act on their behalf. An agent may operate in a way that is contrary to the principal's best interests. So now, in the case above, you would have been one of the many principals (investors) who put the money in a fund and a power of attorney was with the agent (fund manager). So technically, the ability to make decisions with your money is not decentralized. If you realize that your fund is investing in something against the judgment of a more extensive investor base, there is nothing you can do. Now, how can <keyword id="2721952" type="General" weightage="20" keywordseo="crypto" source="Orion">crypto</keyword> change that? How can it give you the power to tell the Goliath what to do and, more importantly, what not to do for your benefit? DAOs ensure inclusive decision making This is where <keyword id="786882" type="General" weightage="20" keywordseo="dao" source="Orion">DAO</keyword>, or Decentralized Anonymous Organization, comes in. DAOs are decentralized business structures where the decision-making power lies with the group instead of a central authority. So if any updates or changes are to be made in the present system, forge partnerships or look at raising capital, these decisions are taken through votes. Hence, this process ensures inclusive decision-making across the group. The voting is done through a kind of token called governance tokens. These are utility tokens that represent every user’s stake in the project and the voting power of the stakeholder is proportional to the number of tokens that they hold. So, for instance, if person A holds 10 tokens vs. person B, who has 5 tokens, person A’s vote has a higher weightage. The most successful example of a DAO has to be MakerDao and its stablecoin DAI. MakerDao is a smart contract system that issues a stablecoin, DAI, pegged in value to the dollar, but it's not dependent on any kind of traditional financial banking system. A smart contract backed by a large pool of Eth maintains a peg to the US dollar. Data feeds provide the price of US dollars from the outside. Depending on the price, that's the amount of ether you can recover from one DAI. This means that this <keyword id="6357017" type="General" weightage="20" keywordseo="cryptocurrency" source="Orion">cryptocurrency</keyword> doesn't depend on a centralized infrastructure. It has a stable value and you could extend this kind of model to not just the US dollars like you could have exposure to other real-world assets and commodities. A unique purpose DAOs are formed for a unique purpose that can range from something socially motivated like raising funds for a war-torn country to pooling funds so that a group can be investors in a project. PleasrDAO bought the sole existing copy of the album “Once Upon a Time in Shaolin” by the Wu-Tang Clan for a whopping $4 million and the original “Doge” meme NFT, for $4 million. This is one real-life case of how DAOs invest in something by pooling money and can later decide if they want to sell these assets for a higher price. And the decision to sell is based on voting. Surmise, it is for the benefit of the investors and not an ‘agent’. Other DAOs with social propensity are HerStory, which collects and funds projects by Black women and non-binary artists, and Ukraine DAO, which has raised more than $6.7 million in support of Ukraine's army. Though the concept of DAO exists on-chain and is popular with investors of DeFi (Decentralised Finance) presently, it is still a long way from going mainstream. However, everything digital we see today was once on the fringes. Nevertheless, there is a lot that mainstream finance can learn from such collaborative investment ecosystems. At least then, the focus will be for everyone to have their return on investment, not only the agent. This article is authored by Rajagopal Menon, VP Marketing at WazirX SEE ALSO: <a href="https://www.businessinsider.in/business/corporates/news/tata-consumer-sees-growth-on-the-back-of-starbucks-tea-and-salt/articleshow/92410036.cms">Tata Consumer sees growth on the back of Starbucks, tea and salt</a> <a href="https://www.businessinsider.in/careers/news/four-12-hour-days-or-five-10-hour-work-days-difficult-choices-ahead-of-a-4-day-work-week/articleshow/92409609.cms">Four 12-hour days or five 10-hour work days - difficult choices ahead of a 4-day work week</a>

Cryptos can change the way you invest, by taking the ‘agent’ off the books

What is cryptocurrency? What to know about this increasingly popular digital currency before investing

<ul><li>Stablecoins are cryptocurrencies that are pegged against an existing fiat currency, like the American Dollar.</li><li>They aim to mitigate the volatility that normally comes with other cryptocurrencies like Bitcoin or Ethereum.</li><li>Among the stablecoins, Tether is considered the most popular among all with a market cap of more than $60 billion.</li></ul>The world of <keyword id="6357017" type="DEFINITION" weightage="20" keywordseo="cryptocurrency">cryptocurrency</keyword> is synonymous with volatility, as the value of Bitcoin and other currencies has always been highly dynamic. But, a new type of <a href="https://wazirx.com/signup?invite=2kpah6gr&amp;utm_source=business-insider&amp;utm_medium=referral&amp;utm_campaign=microsite">cryptocurrency</a> is trying to change that narrative — enter Tether, the world’s first stablecoin. While other stablecoins have entered the market, Tether is considered the most popular till date, with a <a href="https://coinmarketcap.com/currencies/tether/">market cap</a> of more than $60 billion. It requires a custodian to regulate the currency and then reserves a certain amount of collateral as security. Tether’s origin story Originally called ‘RealCoin’, the possibility of building a stablecoin was first proposed in 2012. The idea was that 1 Tether or USDT would be worth $1. So, 100 USDT would be $100 and so on. The first tokens were finally issued two years later by co-founders Brock Pierce, Reeve Collins, and Craig Sellers. And, come 2015, the Hong Kong-based cryptocurrency exchange, Bitfinex, was the first to host the <a href="https://wazirx.com/signup?invite=2kpah6gr&amp;utm_source=business-insider&amp;utm_medium=referral&amp;utm_campaign=microsite">cryptocurrency</a> on its platform. Today, it's used by Binance, WazirX, Huobi, and many more exchanges to provide liquidity and a hedge against market volatility. However, it has had its fair share of controversies since then. Tether’s shady past In 2017, it was revealed that Tether and Bitfinex shared the same management and corporate team. It proved that the two companies were closer than they wanted to admit publicly, and Bitfinex played a critical role in encouraging its adoption by floating it on the exchange. Critics have regularly <a href="https://research.aimultiple.com/tether/">pointed</a> out that it could be a scam because there's no real collateral to back the cryptocurrency. The company has tried giving out loans to its affiliates as collateral, but transparency and audits were greatly limited. In 2019, iFinex , the parent company of Tether Ltd., was <a href="https://www.coindesk.com/bitfinex-ny-prosecutors-tether-850-million-allege">accused</a> of trying to cover up an $850 million loss by taking over around $700 million of Tether's cash reserves and using it to repay investors. The company said the sum was kept for safeguarding and wasn't seized. How are stablecoins different from other <keyword id="2721952" type="PERSON" weightage="20" keywordseo="crypto">crypto</keyword> currencies? Cryptocurrencies like Ether and Bitcoin operate on the free market principle, which means that their worth is purely commanded by supply and demand. While this makes them an excellent opportunity to make a quick buck, it also makes them very unreliable. A ‘currency’, in the traditional sense, has to be stable for people to rely on it for everyday transactions. Fiat currencies, like the Dollar or the Rupee, are controlled and regulated by central banks to keep a check on inflation, debt, and other external factors. <a href="https://wazirx.com/signup?invite=2kpah6gr&amp;utm_source=business-insider&amp;utm_medium=referral&amp;utm_campaign=microsite">Bitcoin</a>, Ethereum, and other coins cannot offer this stability, making them a less favorable option for those looking to park cash temporarily. Stablecoins, on the other hand, are cryptocurrencies that are pegged against an existing fiat currency, like the American Dollar. We can say that stablecoins have a fixed value because their daily fluctuation is negligible. Stablecoins can be pegged to anything, including gold and silver. In addition to Tether (USDT), TrueUSD (TUSD), MakerDAO (DAI), and Paxos Standard (PAX) are some of the most widely used stablecoins. Despite a few inconsistencies, Tether has stood the test of time and continues to offer what it claims — a simple, stable coin that's ideal for parking cash with minimal risk. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/cryptocurrency/news/chinas-crypto-miners-are-looking-at-texas-amid-the-great-mining-migration/articleshow/83601284.cms">Crypto’s ‘great mining migration’ has Chinese miners looking at Texas</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/tech/enterprise/news/oneplus-officially-announces-its-integration-with-oppo/articleshow/83596714.cms">OnePlus officially announced its integration with Oppo — this is what it could mean for users</a>

Tether is a cryptocurrency that's not volatile and pegged against the US Dollar — here's everything you need to know

<ul class="summary-list"><li><keyword id="11896271" type="UNKNOWN" weightage="60" keywordseo="ether" source="Orion">Ether</keyword> beat <keyword id="11893902" type="UNKNOWN" weightage="60" keywordseo="bitcoin" source="Orion">bitcoin</keyword> as the most-donated <keyword id="11893898" type="UNKNOWN" weightage="60" keywordseo="crypto" source="Orion">crypto</keyword> in 2021 with $30.79 million in donation volume.</li><li>The data was released Wednesday by <a href="https://thegivingblock.com/annual-report/ar21/">The Giving Block</a>, a crypto philanthropy platform for organizations and individuals.</li><li>Bitcoin was the second most donated crypto, followed by USD Coin.</li></ul>Ether beat bitcoin as the most-donated cryptocurrency in 2021 with $30.79 million in donation volume, according to data from <a href="https://thegivingblock.com/annual-report/ar21/">The Giving Block</a>, a crypto philanthropy platform for organizations and individuals.Bitcoin — historically the crypto with the highest annual donation volume — came in second last year with $25.88 million. Stablecoins were also gifted a lot, according to The Giving Block's year-end report released Wednesday. In sum, 85% of all donation volume was comprised of bitcoin, ether, and USD coin.<table style="border-collapse: collapse; width: 100%; height: 132px;" border="1"><tbody><tr style="height: 22px;"><td style="width: 50%; height: 22px;">Cryptocurrency</td><td style="width: 50%; height: 22px;">Amount donated</td></tr><tr style="height: 22px;"><td style="width: 50%; height: 22px;">Ethereum</td><td style="width: 50%; height: 22px;">$30,794,056</td></tr><tr style="height: 22px;"><td style="width: 50%; height: 22px;">Bitcoin</td><td style="width: 50%; height: 22px;">$25,885,974</td></tr><tr style="height: 22px;"><td style="width: 50%; height: 22px;">USD Coin</td><td style="width: 50%; height: 22px;">$4,739,117</td></tr><tr style="height: 22px;"><td style="width: 50%; height: 22px;">Dai</td><td style="width: 50%; height: 22px;">$2,247,258</td></tr><tr style="height: 22px;"><td style="width: 50%; height: 22px;">Flow</td><td style="width: 50%; height: 22px;">$1,407,000</td></tr></tbody></table>The platform saw people donate more than 70 cryptos as more options were added throughout the year. For instance, meme token shiba inu was introduced in November and a month later was already the fourth-most donated crypto.For the year, the total donation volume soared 1,558% compared to the previous year to $69.6 million. The average crypto donation size stood at $10,455, a 236% jump from 2020. The platform attributed the increased giving to three factors: the crypto market's bull run performance, which resulted in the appreciation of many crypto assets; the diversity of assets donated, which reflected the evolution of the digital asset ecosystem; and the deadline to be eligible for the tax benefits of donating crypto.Nonprofits also became more open to accepting digital assets. The Giving Block said more than 1,000 organizations were accepting cryptos by the end of 2021. "Many nonprofits have looked to cryptocurrency as the next logical step in fundraising innovation," the report said. "For several organizations, crypto philanthropy addresses the more specific challenge of creating sustained, meaningful engagement with younger donors, and taps into a powerful tax incentive to donate."Non-fungible token projects also donated $12.3 million in 2021, emerging as a major force in charitable crypto giving. One gift was valued at $3.5 million at the time of the donation, the report said.Founded in 2018, The Giving Block is an organization that aims to promote crypto philanthropy. The platform currently enables more than 1,000 organizations, charities, universities, and faith-based organizations of all sizes to accept crypto donations.

Ether beat bitcoin as the most donated cryptocurrency for the first time in 2021, data shows

<ul class="summary-list"><li><keyword id="219358" type="PERSON" weightage="60" keywordseo="Mark-Cuban">Mark Cuban</keyword> said he got hit by losses in <keyword id="6359357" type="COMPANY" weightage="60" keywordseo="titan">Titan</keyword>, a token that crashed to $0 from $60 on Thursday.</li><li>It reportedly crashed as whale accounts unloaded their shares and triggered panic selling.</li><li>"I got hit like everyone else," Cuban tweeted. <a href="https://www.businessinsider.com/?hprecirc-bullet"></a></li></ul>The billionaire investor Mark Cuban said he traded a DeFi token that crashed to zero in one day.The token, known as the Iron Titanium Token, or Titan, was part of <keyword id="11465657" type="UNKNOWN" weightage="60" keywordseo="iron-finance">Iron Finance</keyword>, an algorithmic-stablecoin project.On Thursday, Titan plunged to nearly zero from about $60 as large whale accounts dumped their holdings and triggered panic selling, <a href="https://www.rekt.news/iron-finance-rekt/">Rekt News said</a>.Cuban <a href="https://twitter.com/mcuban/status/1405306497257586688?s=20">tweeted</a> that he'd gotten hit by the token's massive slide. "I got hit like everyone else," he said. "Crazy part is I got out, thought they were increasing their TVL enough. Than Bam."It wasn't clear how much money Cuban lost or when he exited his trade. He <a href="https://www.bloomberg.com/news/articles/2021-06-17/mark-cuban-defi-iron-finance-crashed-100?sref=vuYGislZ">told Bloomberg News</a> that Titan made up a small percentage of his crypto portfolio but enough that he "wasn't happy" about the trade.The billionaire investor mentioned Titan in a <a href="https://blogmaverick.com/2021/06/13/the-brilliance-of-yield-farming-liquidity-providing-and-valuing-crypto-projects/">blog post</a> on Sunday titled "The Brilliance of Yield Farming, Liquidity Providing and Valuing Crypto Projects."In the post, he said he was a liquidity provider for QuickSwap, a decentralized exchange platform:"I provide 2 different tokens (DAI/<a href="https://www.livecoinwatch.com/price/IRONTitaniumToken-_TITAN">TITAN</a>) that enable Quikswap to offer swaps between these two tokens. <a href="https://info.quickswap.exchange/pairs">As you can see here</a>, this pair is one of many, and you can also see that based on the .25 pct of volume in this swap that Quickswap pays, my return on my initial <a href="https://info.quickswap.exchange/pair/0xc0e5f9a20e114fbcc93c5d643127b9388b849b4a">$75k investment</a> (based on fees only) as of this writing, is an annualized return of about 206% (Based on the fees earned in the last 24 hours. This return percentage will vary all over the map depending on the activity.) But the cool thing is while I don't get any extra rewards for this pair (you reading this Titan and Quickswap ???), I am currently the only LP in this pool, so I get 100pct of the fees. In every pool, the LPs, get a percentage of the fees based on the percentage of the liquidity they provide."So in exchange for providing the Liquidity both TITAN and Quickswap need for their businesses, I get .25 of the transaction volume for swaps between these two tokens. As long as I keep making a good return, I will keep my money invested (Volatility can create mark to market losses). If not, I can immediately withdraw it (some platforms have a hold period or penalties) . Have enough LPs and the exchange is far more capital efficient than a similar traditional exchange business and i get to make some money."Cuban told Bloomberg News that there should be regulation to define what a stablecoin is and what collateralization is acceptable."Even though I got rugged on this, it's really on me for being lazy. The thing about de fi plays like this is that its all about revenue and math and I was too lazy to do the math to determine what the key metrics were," Cuban said in an email to Bloomberg."But if you are looking for a lesson learned , the real question is the regulatory one. There will be a lot of players trying to establish stable coins on every new l1 and L2. It can be a very lucrative fee and arb business for the winners."Cuban did not immediately respond to Insider's request for comment.

Mark Cuban says he lost money trading a DeFi token called Titan that crashed from $60 to zero in one day

<ul class="summary-list"><li><keyword id="6354947" type="General" weightage="60" keywordseo="bitcoin" source="Orion">Bitcoin</keyword> may be the most know <keyword id="6357017" type="DEFINITION" weightage="60" keywordseo="cryptocurrency" source="Orion">cryptocurrency</keyword>, but there is a world of altcoins out there with their own specific uses. </li><li>Apart from currencies, these cryptoassets have various utilities from "<keyword id="11186908" type="General" weightage="60" keywordseo="proof-of-stake" source="Orion">proof of stake</keyword>" to decentralized finance.</li><li>Insider collected the most common types of <keyword id="2420795" type="PERSON" weightage="60" keywordseo="cryptocurrencies" source="Orion">cryptocurrencies</keyword> and 15 examples from a wide world of digital assets. </li></ul>Investing in cryptocurrencies has been synonymous with investing in bitcoin, especially for those new to the digital asset space. <a href="https://markets.businessinsider.com/currencies/btc-usd">Bitcoin</a>, after all, is often regarded as the first modern <a href="https://wazirx.com/signup?invite=2kpah6gr&amp;utm_source=business-insider&amp;utm_medium=referral&amp;utm_campaign=article-editorial">cryptocurrency</a>, founded by an anonymous developer under the pseudonym Satoshi Nakamoto in 2009. "We think bitcoin had the first-mover advantage," Ian Balina told Insider. Balina is the founder and CEO of <keyword id="6937186" type="General" weightage="60" keywordseo="token" source="Orion">Token</keyword> Metrics, a data-driven investment research platform for cryptocurrencies. Today, bitcoin boasts of a $1 trillion dollar market capitalization and enjoys the support of 22 public companies, according to <a href="https://www.coingecko.com/en/public-companies-bitcoin">data by CoinGecko</a>. These include major firms from <a href="https://markets.businessinsider.com/currencies/news/michael-saylor-microstrategy-buys-15-million-of-bitcoin-btc-2021-4-1030274270">MicroStrategy</a> to <a href="https://markets.businessinsider.com/currencies/news/tesla-bitcoin-price-holdings-grew-2-billion-tsla-btc-2021-4-1030358711">Tesla</a>. Not included in that number are major corporations adopting bitcoin such as <a href="https://markets.businessinsider.com/currencies/news/goldman-sachs-restarts-crypto-trading-and-will-begin-trading-bitcoin-futures-report-2021-3-1030137170">Goldman Sachs</a>, <a href="https://markets.businessinsider.com/currencies/news/bitcoin-bny-mellon-transacting-cryptocurrency-market-btc-bank-investment-management-2021-2-1030073231">Bank of New York Mellon</a>, and <a href="https://www.businessinsider.com/more-companies-accepting-bitcoin-cryptocurrency-paypal-starbucks-2021-4">PayPal</a>. <a href="https://markets.businessinsider.com/currencies/eth-usd">Ether</a> comes in at a close second. The global and open-source platform for decentralized applications that runs on the ethereum blockchain, is the runner-up to bitcoin with a valuation of $318 billion. Many analysts predict it will <a href="https://markets.businessinsider.com/currencies/news/ether-versus-bitcoin-price-crypto-analysis-experts-why-2021-4-1030358382">surpass the king of cryptocurrencies</a> down the road, citing <keyword id="6709758" type="General" weightage="60" keywordseo="Ether" source="Orion">ether</keyword>'s ability in storing computer codes that power contracts and applications. Beyond these two, there is a wealth of <a href="https://wazirx.com/signup?invite=2kpah6gr&amp;utm_source=business-insider&amp;utm_medium=referral&amp;utm_campaign=article-editorial">crypto assets</a> in the nascent space all with different utilities. "We're thrilled about the growing adoption of crypto beyond bitcoin," Greg King, CEO of Osprey Funds, a crypto asset manager that launched Osprey Bitcoin Trust, told Insider. "Investor and market appetite continues to grow for funds providing access to some of the most exciting coins and tokens." While cryptocurrencies are difficult to separate into neat and comparable categories, London-based fintech entrepreneur Viktor Prokopenya said the underlying popularity metrics can be borrowed from more traditional asset analysis. He named market capitalization, price volatility, and momentum as examples. "I believe we will see an increasing disregard for traditional portfolio theory and a reduction in diversification by many retail investors," he told Insider. "Of course, this could work out for the better but conventional prudence is advised." Insider, with the help of experts, lists here the five most common types of crypto uses with 15 examples of coins from across the space. <h3>1. Currencies </h3>This is the most commonly known utility of cryptocurrencies. Several companies have allowed the purchase of their products using cryptocurrencies such as <a href="https://markets.businessinsider.com/currencies/news/2-reasons-buying-tesla-with-bitcoin-bad-idea-2021-3-1030247584">Tesla car,</a> while <a href="https://markets.businessinsider.com/currencies/news/mark-cubans-dallas-mavericks-will-accept-dogecoin-for-tickets-2021-3-1030151539">dogecoin can be used to buy Dallas Mavericks' tickets and merchandise</a>. Other currency examples are <a href="https://litecoin-foundation.org/businesses/">litecoin</a> and <a href="https://www.egifter.com/buy-gift-cards-with-bitcoin-cash">bitcoin cash</a>. <h3>2. Stablecoins </h3>A stablecoin is a type of cryptocurrency that is backed by a reserve, which could be a cryptocurrency, a fiat currency, or a commodity. For instance, <a href="https://markets.businessinsider.com/currencies/usdt-usd">tether</a> is pegged to the US dollar. USD coin-created by Coinbase and Circle-and dai are also both pegged to the American currency. <h3>3. Proof of Stake </h3>This is a mechanism that regulates the process of transactions between users, ensuring that these are verified and added to a blockchain's public ledger. PoS was born out of another popular algorithm, Proof of Work. Both have the same goal of reaching consensus in the blockchain, <a href="https://academy.binance.com/en/articles/proof-of-stake-explained">Binance Academy explained</a>, and only differ in the process. Examples of cryptocurrencies that use PoS are ether (decentralized applications), <a href="https://markets.businessinsider.com/currencies/ada-usd">cardano</a> (academic research), and solana (blockchain applications). Read more: <a href="https://www.businessinsider.com/crypto-arbitrage-trading-strategy-alameda-research-sam-bankman-fried-billionaire-2021-4" target="_blank">A 29-year-old self-made billionaire breaks down how he achieved daily returns of 10% on million-dollar crypto trades, and shares how to find the best opportunities</a> <h3>4. Decentralized Finance </h3>Also known as <a href="https://www.businessinsider.com/how-to-invest-defi-bitcoin-crypto-cio-launches-new-fund-2021-2?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingestm=ingest" target="_blank">DeFi</a>, this is an umbrella term for various applications that use public blockchains and crypto assets to disrupt the traditional financial sectors. DeFi is an alternative to a system that is tightly controlled and held together by decades-old infrastructure, according to a <a href="https://ethereum.org/en/defi/">website funded by the Ethereum Foundation</a>. DeFi, an industry now worth <a href="https://defipulse.com/" target="_blank">over $66 billion,</a> is a major reason for ether's recent record-breaking week during the end of April. Other cryptocurrencies that use DeFi applications according to Balina are: uniswap, a decentralized exchange for trading ethereum-based tokens via an automated order book; chainlink, a decentralized oracles network for bringing off-chain data onto the blockchain; and aave, a decentralized lending platform. "In the last few years, we have seen DeFi also take up a significant spot within any listing category," Ben Weiss, CEO of bitcoin ATM operator CoinFlip, told Insider - adding that many factors remain to be seen after the <a href="https://www.coindesk.com/ethereum-improvement-proposal-1559-london-hard-fork">London upgrade in June</a>. Weiss continued: "I would expect the DeFi space to grow as the momentum of both DeFi usage as well as innovation is growing in the billions of dollars every other day. Decentralized market makers like uniswap and pancakeswap changed what it means to be liquid and crypto accessibility in general." <h3>5 . Non-Fungible Tokens </h3>NFTs are <a href="https://markets.businessinsider.com/news/stocks/nfts-majority-americans-surveyed-digital-art-more-than-a-fad-2021-4-1030272455">unique digital assets</a> secured on a blockchain supported by ethereum. Each <keyword id="4668945" type="PERSON" weightage="60" keywordseo="nft" source="Orion">NFT</keyword> has its own signature, which can be verified in the public ledger and cannot be duplicated. When people buy NFTs, they gain the rights to the <a href="https://www.businessinsider.com/why-are-people-buying-nfts-investing-in-nft-crypto-art-2021-3?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingestm=ingest" target="_blank">unique token</a> on the blockchain, and not the <a href="https://markets.businessinsider.com/news/stocks/nft-art-market-rapid-growth-slowdown-non-fungible-tokens-2021-4-1030371073">artworks</a>, <a href="https://www.businessinsider.com/non-fungible-tokens-nfts-have-taken-over-heres-why-theyre-important-2021-4">collectibles</a>, or <a href="https://markets.businessinsider.com/currencies/news/cryptocurrency-market-trends-this-year-according-to-pwc-bitcoin-2021-3-1030255805">tweets</a> linked to the NFTs themselves. Many of these are built on ether, Osprey said, but flow, tezos, and algorand also support NFTs. "The potential applications of NFT technology are virtually endless," he added. Other examples are theta network (video streaming blockchain) and chiliz (sports industry).

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