Santiment a crypto-focused data analytics firm recently researched on the most
Santiment a crypto-focused data analytics firm recently researched on the most stable of the Stable-Coins. There were nine stable coin contenders in the race, and the outcome was not all that surprising.
Tether (USDT) came out as a clear winner followed by USDC, PAX, and GUSD. The parameters for the test were standard deviation analysis, which showed that out of all other nine contenders, USDT was the most stable coin over the year. Another interesting observation made out of the research was that all the stable coins which were able to make it to the list were centralized against fiat currency.
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Santiment also conducted a linear regression analysis for the volume of the coin against the price volatility in a given time frame. The investigation was done to understand the volatility factor in stable currencies. The analysis for volume was done in two categories, first the market volume of the coin and second using Bitcoin’s market value as a parallel.
The result of the analysis proved that like all other coins, even stable currencies react strongly to high volume and show volatility regarding price. However, the decentralized DAI stable coins showed positive growth on both the volume metrics in consideration. In another report, the use of DAI has shown tremendous growth in recent times.
A Little History of Tether
Tether acing the stable coin test might come up as a surprise for many in the crypto world. The king of stable coins Tether has anything but a stable history, which has often found itself in hot waters for one reason or another.Bitfinex Exchange shares the management and banking relations with Tether has been marred in controversy from the beginning. A recent report showed that the law enforcement agencies were investigating Bitfinex and Tether for manipulating the market. The exchange was reportedly printing excess tether tokens with no actual baking against the dollar.
The increasing pressure from law enforcement agencies has made Bitfinex allow the trade of tether against fiat currencies such as dollar and euros. The provision also let the users deposit and withdraw in fiat currencies. Tether has allowed the users on its website to withdraw dollars against the USDT but only if the withdrawal amount is $100,000 or more.
Final Thoughts
Tether might have come up as the clear winner among stable coins, but the increasing debate over its centralization and tryst with law enforcement agencies might prove to be a roadblock. The team behind the tether must look into all these aspects and prove its mettle of being in the race for a long run.