Ethereum processed over $835 billion of stablecoin volume in 2020,

It took nine years for the first stablecoin to appear in crypto. Three years after launched the Frontier and nine years since was activated. Stablecoins are digital currencies that are issued by a private entity to track the performance of fiat.

Stablecoins are a Shield against Volatility and Conduits into CryptoIn crypto circles, stablecoins aim to minimize volatility. Since launch, leading digital assets like Bitcoin and Ethereum are known for their price swings.

Stablecoins were introduced for investors looking for a reliable shield whenever prices are dumping. Conversely, when prices are trending higher, traders can use stablecoins to invest in cryptocurrencies.

Since the first stablecoin, Tether (USDT), was introduced in February 2018, it has enjoyed a first-mover advantage.

Stablecoins are indispensable in Crypto and DeFiAccording to The Stablecoin Index by Messari, USDT is the most valuable stablecoin with a market cap of $21.21 billion. With this valuation, it has flipped (XRP) to be the third most valuable digital currency.

Other popular stablecoins include USDC by Circle with a market cap of $3.61 billion and DAI that is algorithmically pegged to the track the USD. It has a market cap of $1.1 billion.

There are six categories of stablecoins, classified depending on the backing asset. Common types like USDT and USDC are backed by fiat currencies. As BTC PEERS also reported, Germany’s Bankhaus von der Heydt (BVDH) has launched a Euro-backed stablecoin.

However, others like DAI and BitUSD are backed by cryptocurrencies. Some, like HelloGold, are backed by precious metals, while Reserve employs a hybrid model.

In a recent interview, Bohdan Prylepa, the CTO and co-founder of Prof-it Blockchain Ltd, said stablecoins are “indispensable” in crypto, providing what traders need.

He said:

“Stablecoins are an indispensable part of crypto and DeFi, especially. Traders yearn for stability without restrictions, and stablecoins like USDT, DAI, and USDC available in various platforms like Ethereum, Tron, and the Omni Network, provide exactly what they want.”

Stablecoin On-Chain Volume Rose to Over $1 Trillion in 2020His comments come when the cumulative on-chain volumes of stablecoins in 2020 rose to above $1 trillion for the first time.

Most of them were processed in Ethereum.

According to a report by the Block Research, Ethereum processed over $835 billion of all stablecoin volumes dominating Tron and the Omni Network, respectively.

In the early days of crypto, the Tether launched on the Omni Network. However, with demand from Ethereum-based dApps, they shifted. It is from Ethereum that billions of USDT have been minted in 2020 coinciding with the exponential rise of DeFi over the last 12 months.

DeFi represents a paradigm shift. By building “Money Legos” and mimicking traditional finance…