A Brief History Of Stablecoins

1

Tether (USDT)

Tether (USDT) was launched in 2014 and became the first stablecoin to gain significant traction in the crypto space. Every USDT is 1:1 backed by $1 of cash or cash equivalents (of varying convertibility), held by the issuing company, which is based in Hong Kong. Today, Tether is the most popular stablecoin and is widely supported by exchanges, with a supply of around 70 billion USDT and trading volumes of $50 billion per day at the time of writing.

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2

Maker (MKR)

DAI draws its inspiration from the failed BitUSD experiment, and traces its origins back to 2015, when the upcoming Ethereum platform offered the possibility of complex smart contracts for the first time. DAI is a decentralized stablecoin, generated by the Maker Protocol, which is managed by the MakerDAO community. Unlike fiat-backed stablecoins, every DAI is collateralized by at least $1 worth of on-chain cryptocurrency reserves, which are locked in Maker Vaults. This approach removes many of the single points of failure inherent in centralized stablecoins, but can mean slightly more price variation (a "soft peg" to the US Dollar) because DAI cannot be directly redeemed for USD. Single-Collateral DAI was launched in 2017, and then Multi-Collateral DAI in 2019. There are around 7.5 billion DAI in existence.

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