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How to create a Stablecoin on XDC Network? - PerfectionGeeks

Set Up Stable Coin on XinFin Network

April 26, 2022 11:30 AM

Stablecoin on XDC Network

A stable currency can thrive in global transactions due to the growing demand for cryptocurrency. Blockchain technology has been extensively researched by people from many industries, including healthcare, logistics, and fintech. Different industries can benefit from the decentralized aspect and safety features of Blockchain technology for smooth operation and regulation. Industries can use the different crypto networks to deploy stablecoins within a cryptocurrency ecosystem. Investors and traders can access cryptocurrency by holding funds. These funds are stablecoins and key components of the Blockchain network's mechanism.

Stable coins by XinFin XDC Network aim to bridge the gap between cryptocurrencies' benefits and the stability offered by fiat currency. To combat volatility, it is a crypto token whose value is tied to the national currency's price.

The question now is why we need a stable currency

Although cryptocurrencies can be used worldwide, Ether and Bitcoin are highly volatile. Bitcoin's price rose from USD 1000 to USD 22000 in 2017. It is not sustainable, and users and investors need more stability.

Imagine paying USD 30 for dinner today and USD 40 tomorrow. This is because the crypto token's value went up. This kind of investment is not possible for small investors.

Although cryptocurrencies can be used worldwide, Ether and Bitcoin are highly volatile. Bitcoin's price rose from USD 1000 to USD 22000 in 2017. It is not sustainable, and users and investors need more stability.

Imagine paying USD 30 for dinner today, and that same amount is worth USD 40 tomorrow. This is because the crypto token's value went up. This volatility is too risky for small investors. Stable coins were created to help drive the adoption of cryptocurrencies.

It might be tempting to ask why we should create crypto tokens that are fiat-backed instead of fiat currency. Decentralized currencies don't require trust to be established by a central authority, reducing costs.

Cross-border payments can also be made with cryptocurrencies quickly. Crypto tokens backed by stable fiat currency and assets can increase their value and build trust with investors and users.

What is Stablecoin, and how can you use it?

If you are wondering what is Stable Coin? So, stablecoin is a cryptocurrency whose value can be associated with a tangible asset such as real estate, gold, or the US dollar. The purpose of this value association between a stablecoin and a tangible asset is to stabilize the price and prevent fraudulent activity in the cryptocurrency ecosystem. Although there are many cryptocurrencies, such as Ether or Bitcoin, they have the disadvantage that their prices can fluctuate. The value of a stablecoin is fixed against an asset, eliminating the possibility of price fluctuation.

Stablecoins from XDC Network aims to bridge the gap between the benefits and stability of cryptocurrencies and fiat currencies. While cryptocurrencies can be used worldwide, few coins such as Bitcoin or Ether are volatile. In 2017, Bitcoin's value rose from USD 1000 to US$ 20000. The instability of Bitcoin's value makes it unsustainable. Because decentralized currencies don't require a central authority to ensure trust in the currency ecosystem, additional costs are minimized. Now, it’s time to know about different types of Stablecoins.

Following are the different types of Stablecoins

As you can see, there are many types of stablecoins.

Fiat-Backed

These stablecoins are backed by the fiat currency. Fiat-backed stablecoin tokens have a value of 1:1. Tether, a stablecoin token, is valued at 1:1 against the USD. A fiat currency can be disposed of as collateral to ensure that a stablecoin is fiat-backed. The financial custodian must be able to dispose of fiat currency collateral. Regular audits are necessary to determine the collateralization of the token. The Gemini stablecoin (GUSDT) is an example.

Non-collateralized

non-collateralized stablecoins refer to those that are not collateralized and are based on the fundamentals of the Seigniorage Shares System. The concept of Seigniorage explains the difference in the value and printing costs of money. These coins are dependent on an algorithm that changes the supply to control their price. These stablecoins can be sold using smart contracts if their price is lower than the linked currency. If their value is higher, they will be offered to the market in more tokens.

Cryptocurrency-backed

The cryptocurrency-backed stablecoin works the same way as the legal currency-backed steady currency. It does not allow the use of crypto-backed stable currency as collateral. Instead, you can only use fiat currency. For example, Ethereum can be used as collateral to create cryptocurrency-backed stablecoins. To compensate for volatility in cryptocurrencies, these tokens will use security compromises. This indicates that stablecoins won't rely on encrypted collateral in a 1:1 ratio.

Commodity-Collateralized

Stablecoins backed with commodities can be backed by other exchangeable assets such as real estate or precious metals. One of the most popular guaranteed commodities is gold. Commodity-backed stabilitycoins are tangible assets that have a certain real value. These commodities can appreciate over time, making them more attractive to keep and use. Anyone can invest in property or precious metals worldwide with commodity-backed stablecoins. These assets are generally reserved for wealthy investors. Stablecoins have opened up new investment opportunities for ordinary people all over the globe.

What is XDC Network exactly?

Stable Coin on XDC Network is a hybrid blockchain for enterprises and is a great choice. It is an interoperable, highly liquid blockchain. It operates on a Delegated Proof of Stake Consensus. The XDC platform uses a hybrid architecture to aid developers and users in creating interoperable dApps and hybrid relay bridges. XDC Network allows fast settlement, digitization, tokenization, and quick settlement of trade transactions. It combines the best of both public and private blockchains with the help of a hybrid Blockchain system. XDC Network is a Blockchain that can transform international finance, trade, and supply chains. It is also a next-generation computing network that uses blockchain technology to connect global communities and businesses. XDC, its native fuel, powers the Network. Businesses can use both public and private blockchain systems to securely and transparently transmit data.

The XDC protocol is a way to use the protocol as a confirmation layer and messaging layer for approved payments, both national and cross-border. Financial institutions can recognize XDC tokens as a payment settlement layer. The XDC protocol architecture supports the use of existing cryptocurrency smart contracts layers, AML and KYC, and price stability. It supports Guarda wallets as well as biometric hardware wallets. XDC cryptocurrency is being promoted at the moment. Many investors believe it will make large profits over time. We hope now you have understood what is XDC Network

How do you create a Stablecoin in XDC Network?

Creating a stablecoin via the XDC Network does not require technical expertise. The XDC Network makes it easy to create a stablecoin. There are two types of networks that can be used to create a Stablecoin: XDC Apothem Network and XDC Main Network. It is easy to follow the excellent XDC Network documentation process. Each step is clearly defined to fully understand the Stablecoin creation on the XDC Network.

Follow these steps to learn how to create and deploy a Stablecoin via the XDC Network.

Step 1: Unlock the Wallet

To create a stable coin on XDC Network, the first step is to unlock your wallet using a Private key (or XDCPay). If you don't have XDCPay access, install the XDCPay app that works with browsers such as Google Chrome or Mozilla Firefox-Opera.

Step 2: Select a name

Next, choose the name you prefer for your stablecoin.

Step 3: Select a symbol

Continue to choose the appropriate symbol for your stablecoin.

Step 4: Currency Supply

This is the number of tokens that you wish to float on the market or supply to the market for transactions. These must be done according to the reserve fund issue.

Step5: Review and Issue

This is the final step in creating a stablecoin via the XDC Network. Check out the information you provided when creating the stablecoin in XDC Network. After you're satisfied with the information, click on the options issue to close the page.

What makes XDC Network a great platform for creating Stablecoins, and how does it work?

The XDC platform offers several advantages, including the ability to create a stablecoin. This makes it easy for laypeople to deploy a stablecoin.

These are some of the benefits of building a stablecoin using the XDC platform

Minimum Congestion

The network congestion on the XDC platform, compared to other platforms, is very low. This makes the transaction smoother and more efficient.

Transaction Fees Low

Every transaction is subject to a transaction fee that is very low and easily affordable.

Evolution in Nature

The XDC platform is a revolutionary network for creating stablecoins. XDC Network is constantly researching and working on scaling solutions. On-chain scaling is possible through the use of Proof-of-Stake consensus and sharding. This can help improve transaction processing speed and performance while also protecting the security and privacy of the system.

Conclusion

The XDC platform allows organizations to take part in global trading markets at a fraction of the cost of traditional methods due to its smart contracts and real-time settlement capabilities. The XDC Foundation believes this will improve cross-border transactions and support private and public use cases. Get in touch with our skilled developers to better understand the XDC platform's currency deployment mechanism and more information.

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