Complete list of stablecoins to watch in 2024: from fundamentals to applications

Stablecoins have become an indispensable part of the cryptocurrency market. Whether you are a trader, investor, or DeFi user, understanding the operational mechanisms of mainstream stablecoins is crucial. This article will provide a detailed overview of 7 stablecoins worth关注 and their application prospects.

How Stablecoins Bridge Traditional Finance and the Crypto World

Stablecoins are essentially digital assets pegged to real-world assets (usually fiat currencies like USD or EUR). By locking real assets in reserve accounts, stablecoin issuers create an equivalent amount of tokens via smart contracts, ensuring a 1:1 peg. This design theoretically makes stablecoins among the least volatile assets in the crypto ecosystem.

However, history has shown that de-pegging events do occur from time to time. Despite this, stablecoins remain a key bridge connecting fiat currencies and crypto assets, playing a central role in modern crypto trading, payments, settlement, and decentralized finance.

Evolution of the Stablecoin Market Landscape

In the past year, the stablecoin market has undergone significant changes. A mainstream stablecoin that once ranked fifth announced it would cease operations in November 2023, with its market share quickly filled by other participants. This fully demonstrates that the stablecoin track is not static.

Currently, USD-backed stablecoins still dominate, but various innovative stablecoins are continuously emerging. Understanding the differences among various stablecoins is vital for choosing the right trading counterpart.

Detailed List of Mainstream Stablecoins

1. USDT: The Earliest USD-Pegged Stablecoin

USDT was created by Tether Limited in 2014, pioneering the stablecoin industry. As the first cross-platform asset providing digital USD to users, USDT combines the technical advantages of crypto assets with the stability of fiat currency.

Its 1:1 USD peg mechanism is widely recognized. According to the reserve report of September 2023, Tether holds over $83.6 billion in assets, corresponding to $83.2 billion in circulating debt. This ample reserve supports the long-term stability of USDT.

The success of USDT lies in providing low-cost, high-efficiency solutions for global cross-border payments, enabling users to trade USD digitally without relying on traditional banking channels.

2. USDC: A Benchmark for Institutional-Grade Stablecoins

USDC was launched by Circle in 2018, representing the evolution from startup to maturity in the stablecoin industry. The coin is operated collaboratively by several well-known institutions, including prominent payment technology companies and mainstream crypto platforms.

USDC also maintains a 1:1 USD peg, with a current circulating market cap of $75.34 billion, demonstrating strong market acceptance. As a highly liquid asset, USDC has sufficient trading depth on major centralized exchanges and decentralized platforms (DEX), supporting ERC-20 wallet interactions.

3. TUSD: A Stablecoin Prioritizing Transparency

TrueUSD (TUSD) launched in 2018, created by TrustToken and PrimeTrust, aiming to address trust issues in the stablecoin industry. Its core innovation is that funds are fully held by independent third parties, and the issuer cannot directly access user funds, effectively preventing misappropriation risks.

TUSD maintains a 1:1 USD peg, with a market cap now reaching $494 million. Its unique feature is real-time on-chain verification of reserve assets, maximizing transparency. This approach has earned it a reputation as the “most auditable stablecoin.”

4. BUSD: Representative of Exchange-Linked Stablecoins

BUSD was jointly launched by a certain exchange and Paxos Trust, also achieving a 1:1 USD peg. The supply has no upper limit and depends entirely on market demand.

Paxos manages the minting and burning mechanisms of BUSD. When users buy BUSD with USD, new tokens are minted; when they redeem, tokens are burned. BUSD supports both Ethereum and proprietary chain environments, offering flexible deployment options.

5. DAI: An Innovative Decentralized Stablecoin

DAI is the only stablecoin issued by a fully decentralized protocol in the crypto ecosystem. Launched by MakerDAO in 2018, DAI operates without reliance on any centralized institution.

Unlike stablecoins requiring centralized signatures, DAI maintains its soft peg to USD through on-chain algorithms via the Maker protocol. Users generate DAI by collateralizing crypto assets like BTC or ETH in smart contract vaults. This mechanism ensures complete decentralization, and DAI’s market cap has reached $4.44 billion, reflecting market recognition of its model.

6. eUSD and peUSD: New Directions for Yield-Bearing Stablecoins

Lybra Finance has introduced these two stablecoins, representing breakthroughs in stablecoin functionality. eUSD and peUSD not only retain stablecoin properties but also support users in earning yields.

Both tokens are collateralized by liquidity staking tokens (LST), allowing holders to maintain USD stability while earning interest. This “stability + yield” dual feature makes them innovative cases within stablecoins.

7. Synthetic USD: A Stable Solution for Bitcoin Native Users

The synthetic USD approach targets users seeking USD stability without engaging with traditional banking systems. Its core idea is to hedge two related assets to lock in USD prices.

For example, users can establish a $100 short position on Bitcoin via derivatives exchanges. If BTC rises, hedge costs decrease; if BTC falls, hedge costs increase—ultimately maintaining a relatively constant net position. Providers like Galoy have integrated Stablesats, allowing users to directly obtain USD stability through Bitcoin.

Why Stablecoins Continue to Expand Their Applications

The popularity of stablecoins is not a passing fad but based on their ability to solve real-world problems.

Standard in DeFi Ecosystems

In DeFi, stablecoins serve as core payment and settlement tools. Unlike BTC and ETH, which are highly volatile, stablecoins’ price pegs make them ideal collateral assets. Lending protocols, liquidity mining, and other mainstream DeFi products all use stablecoins as settlement units. Although de-pegging events have occurred in the past, they have driven the development of stricter risk control standards.

Hedging Tool for Emerging Markets

For residents of countries with unstable economies, stablecoins offer unique value. Holding stablecoins is equivalent to holding USD assets, effectively avoiding local currency devaluation risks. In high-inflation environments, stablecoins become a lifeline for asset preservation.

More importantly, stablecoins leverage blockchain technology to facilitate cross-border transfers with transaction fees far lower than traditional remittance channels, enabling ordinary residents to participate in the global economy. This is especially significant for regions with weak financial infrastructure.

The Real Risks of Stablecoins Cannot Be Ignored

Stablecoins are not entirely risk-free. Their security heavily depends on the credibility of the issuer and the quality of reserve assets. If the underlying assets depreciate significantly or the issuer faces financial difficulties, de-pegging risks will immediately surface.

Second, the uncertainty of regulatory environments is also a hidden danger. Different countries are still exploring their stance on stablecoins, and no unified regulatory framework has been established, posing policy risks to users.

Additionally, even during normal operations, network congestion can cause transaction delays, preventing users from accessing funds in real-time. Therefore, the stablecoin track still requires more comprehensive risk management tools.

Main Ways to Obtain Stablecoins

The most direct method is to purchase with fiat currency on centralized exchanges or exchange for BTC, ETH, and other mainstream cryptocurrencies. Decentralized exchanges (DEX) P2P markets are also options, offering privacy protection and no asset custody, allowing users full control of their private keys.

Summary

Stablecoins have evolved from experimental stages to become foundational infrastructure in the crypto market. Whether used for trading settlement, value storage, or cross-border payments, stablecoins demonstrate unique value.

With the emergence of decentralized stablecoins like DAI and innovative products like eUSD, the application boundaries of stablecoins are continuously expanding. Against the backdrop of a thriving global crypto ecosystem, the influence of stablecoins is expected to further increase.

Of course, always conduct thorough research before allocating any digital assets. Although called “stable,” stablecoins also carry risks, and rational assessment of one’s financial situation is a necessary prerequisite.