Cryptocurrencies have yet to reach mainstream adoption, but one part of the market that has seen substantial growth is stablecoins. Stablecoins have become popular in the digital-currency industry because they don’t have the wild volatility associated with other crypto assets such as bitcoin. Stablecoin prices are often pegged at a one-to-one ratio to a stable asset such as the U.S. dollar, which is held in reserve as collateral. That means a buyer who pays $1 for a stablecoin usually can redeem it for $1 later on. ...
Maker DAO has developed its DAI token to offer cryptocurrency lending, using ether as collateral to secure DAI tokens. The system allows individuals to trade on the margins, buying more DAI with ether. Pro Venture Capital Traders have used the loans and analysts say the system could be expanded to include personal and business lending without satisfying the demands of traditional banking. Maker DAO’s token is a stablecoin, tokens which have become an important source of crypto market liquidity and which allow traders to use as a place for funds to be held during crypto volatility.