In this modern era with technological advancements, there are some prominent use cases with innovative trends. Such as security mechanisms, blockchain networks, decentralization, NFT, DeFi ecosystem, and utilization of cryptocurrencies for trading. If you are a crypto enthusiast, then you might know that there are more than 3000+ crypto coins and tokens in the market, particularly speaking – bitcoin, the price of this coin changes per minute. Besides, bitcoin is the first-ever digital currency and gave us new perspectives on crypto payments and trading. Likewise, stablecoin entered the global crypto market with the primary aim of boosting cross-border payments and remittances. The Stablecoin concept was first introduced in 2018 globally. But now, it has become a prominent type of digital currency among investors, traders, speculators, and budding startups.
In this current time, the usage of Stablecoins is comparatively equal to the usage of prominent altcoins. It is due to the impacts and benefits of Stablecoins in the crypto marketplace. Also, many individuals started to create stablecoins for their payments and other transactions. That’s why startups, enterprises, and businesses prefer to create stablecoin from the best stablecoin development company.
This article navigates to the complete guide on what is a stablecoin and its types of stablecoin development, the benefits of creating a stablecoin, stablecoin development services, and more. So now, let us start this exclusive guide with…
What are Stablecoins?
Stablecoin is the most modern thing in crypto at this moment. A stablecoin is digital money and the cost is completely pegged to a true resource like gold or the dollar. Stablecoins are non-volatile and regulated.
In general, Stablecoin is a digital form of money whose values are connected to a certifiable resource. They are significantly more settled than ordinary cryptographic forms of money. This is because their qualities and values are pegged to different resources. There are more than 200+ stablecoins available in the market, but some are popular among investors. Such as USTD, DAI, TUSD, and Paxos Standard. You might have a doubt: where to buy a stablecoin? You can buy stablecoins in any reputed crypto trading platform.
Stablecoins come in many types right from crypto-collateralized to fiat-collateralized. Experts in the crypto space say that stablecoins might pay back more than 40 times the original investment. As the name suggests, the stability of a digital currency is maintained. Thus, it results in profiting your business to the next level.
How Does Stablecoin Work?
In recent years, many people are considering cryptocurrency as a reputed way of investing their money. There are many best ways to invest in cryptocurrency. One such best way is investing through stablecoins. Because the price of the stablecoin moves based on the value of fiat currencies. There are so many differences between crypto coins and stablecoins. Crypto coins are highly volatile. Besides, they are not backed with any assets, and is kind of hard to make a great amount of money.
When it comes to stablecoin, it is backed with fiat currency. As we said earlier, stablecoins are low volatile in nature as well as they don’t have huge fluctuations like bitcoins and altcoins. But in stablecoins, it might take a long time to yield a massive amount of profit. You can trust a stablecoin more than any crypto tokens or altcoins because of its backed assets. The working process of stablecoin involves two kinds of processes. One is the purchase process and the other is the redemption process. Now, let us see the working process of stablecoins.
Here a user will submit the wire to a trusted company with the crypto wallet information. Then the trusted company will send a signal to the stablecoin with an escrow agreement. Once the funds are verified, the corresponding stablecoin is sent to the user’s wallet instantly.
If you want to redeem your stablecoin, then a KYC/AML check needs to be conducted. Only after the KYC process, you can redeem your stablecoins.
The working process will be changed based on the type of stablecoins. Currently, there are different types of stablecoin development offered by companies. So, now let us see them…
Types of Stablecoin Development
Here we list the different types of stablecoins that exist in the crypto marketplace.
1. Fiat-collateralized Stablecoin Development
This kind of stablecoin is completely pegged to fiat currencies like the USD, Euro, or any other fiat currencies. It is usually backed at a 1:1 ratio. This means that each stablecoin is equal to one unit of fiat currency. Let us see a small example of the most popular stablecoin, Tether. So that you can have clarity on fiat-collateralized stablecoin. Tether is completely pegged 1:1 with the USD. So one Tether is equal to 1 USD.
One of the main disadvantages of fiat-collateralized stablecoins is, they are not transparent to everyone. However, users require trust to trade in these types of currencies. Also, there is no way to inspect whether the exchanges are following protocol or not. It can be the simplest kind of stablecoins to understand. But they limit the true potential of cryptocurrencies. Also, they act only as proxies for fiat currencies.
2. Crypto-collateralized Stablecoin Development
These currencies are completely pegged to other digital currencies. Here, everything is operated on the blockchain. So it is more transparent and also has open-source codes. Thus, it can be completely operated in a decentralized manner. But these stablecoins are also more complex to understand and also lack popularity.
crypto prices are subject to volatility. So these kinds of stablecoins are often pegged by a diversified reserve of cryptos that can remain stable. Here the ratio of collateralization increases. For example, a crypto-collateralized stablecoin is pegged at 1:2, for each stablecoin. So the cryptocurrency is worth twice the value of stablecoins. In other words, we can say that stablecoin would be collateralized at 200%…
If the price of the collateral cryptos falls by 25%, the stablecoins will still retain their original value. But the value of the collateral is still more than the value of the stablecoins. The most popular crypto-collateralized stablecoin is Dai. which is created by MakerDAO. whose face value is pegged to the USD, but it is collateralized by Ethereum.
3. Uncollateralized Stablecoin Development
This uncollateralized stablecoin comes with open-source code that is visible and auditable by everyone. To understand how this stablecoin works, let us see a small example. Consider that you create a new currency and peg it to the USD. which means 1 new stablecoin is equal to $1. If the value of your stablecoin goes above $1. Then it indicates that the demand for your new stablecoin is high. So the algorithm increases the supply of your coin by printing more stablecoins. It proceeds until the demand meets the supply.
If the value falls below $1, then it indicates that there are many stablecoins in circulation and the demand is low. So this stablecoin is completely programmed to contract the number of coins in circulation until the supply meets demand. So these stablecoins are also called Algorithmic Stablecoins. Because they are programmed with open code and can generate trust in the currency. Also, these are the most transparent and decentralized stablecoins.
4. Commodity-Backed Stablecoin Development
These stablecoins are backed by real-time assets. Such as precious metals, gold, real estate, and oil. These stablecoins have the potential to appreciate simultaneously with the increase in the value of their underlying assets.
One of the great examples of Commodity-collateralized stablecoins is Digix. This stablecoin is completely backed by gold. This means 1 Digix is equal to 1 gram of gold on the Ethereum network. Another example of this stablecoin is Tiberius Coin (TCX). But it is backed by the combination of 7 precious metals that are commonly used in the hardware tech field.
Ok, now let us see…
How to Create a Stablecoin For Business?
Creating a Stablecoin is a complex process that needs a high level of technical expertise. Generally, stablecoin is developed by pegging the assets like crypto, gold, or fiat and other development processes. They can be completely backed in the USD or other fiat currencies according to your business requirements. It is far similar to the currency pegs that the popular central banks mostly do. The biggest challenge in developing a stablecoin is, that you need to hire a team of well-experienced blockchain developers from a trustworthy stablecoin development company in the crypto sector. Besides, the chosen development company also must be an expert in offering all sorts of stablecoin creation services. Therefore, by choosing the best stablecoin development company, you can create your stablecoin without any hassle.
Here we list some of the important steps you need to take into account for developing a stablecoin for your business.
Choose the type of Stablecoin Development
If you are planning to develop a stablecoin, first you need to do market research and select the type of stablecoin that you want to launch for your business. As previously discussed, there are four significant types of stablecoins. Such as collateralized, crypto-collateralized, commodity-backed stablecoin, and non-collateralized stablecoins. It is hard to say one type of stablecoin development is superior to another type. If you aim for long-term stability, then you can prefer algorithmic stablecoin. If your goal is short-term stability where the underlying asset is reliable, then you should opt for collateralized stablecoins. Once you decide the type of stablecoin you want to create, then you can go with the next step.
Choose the Blockchain Platform to Develop Stablecoin
Once you choose the type of stablecoin you want to create, it is time to choose the blockchain platform to create a stablecoin. In the beginning stage, the Ethereum blockchain was the only platform for creating stablecoins, but now it is not the same. The majority of these stablecoins were operating on the Ethereum blockchain before 2018, but now, different blockchains are used for creating stablecoins. Many new platforms are coming up to develop stablecoins which include Tron, EOS, and more. Some crypto startups prefer developing stablecoins on EOS when compared to Ethereum because of the following benefits of EOS.
- Greater interoperability
- High scalability and transaction bandwidth
However, the choice is yours, you need to choose the right blockchain platform for creating stablecoins. Once you have chosen the blockchain platform for developing stablecoins, you need to move to the next step…
Think about the maintenance of Liquidity
When it comes to stablecoin creation, liquidity is the most important factor. If the liquidity is lost, then the whole stablecoin development process might go wasted. We suggest you follow some important steps to make sure of perfect liquidity. Such as
Evaluating Inflation and Value
It is essential to enable an automated monitoring system to offer daily currency rates. Also, the index rates are from the Consumer Price Index(CPI) and Personal Consumption Expenditures(PCE).
The revenues that you get from transaction fees must be split. Some part of the revenues will go to the stablecoin partner and the remaining part goes into the liquidity reserve to enhance the liquidity of the stablecoin.
Protecting from High Supply
If the user wants to sell their stablecoins, then they must be able to do so at current face value minus transaction fees. So it avoids any incentive for the sellers to market their stablecoins at reasonable rates on secondary crypto markets.
Create Technical Designs for the System
In this step, you can design your stablecoin. While designing a stablecoin, you can understand the flow of transactions and how the entire stablecoin system will work. Besides, you might need a system design that will help your users interact with your stablecoin. For example, you might require a mobile app to enable interaction with your stablecoin. So you need premium designing screens for web/mobile apps. Our blockchain experts will provide technical designs for your stablecoin.
Development, Integration of Blockchain, and Launching to Mainnet
Once the design for your stablecoin is ready, the next step is to develop the system. In this development stage, the developers will write smart contracts required to interact with a stablecoin and launch nodes on the blockchain. When your desired features of the stablecoin are created and connected to the blockchain, then you can launch it on the test net. If you are creating a stablecoin by using the Ethereum blockchain, you can find different test nets in the crypto marketplace. Then, check the quality of your stablecoin on the test net. In case, there are any issues or errors. Our developers will fix issues instantly. Once all the issues of your developed stablecoins are fixed, you can launch your stablecoin on the crypto marketplace and make profits.
Highlights of Stablecoin Development
- No Volatility
- Financial enclosure
- High Liquidity
- Increased Revelation
- Authority Token
- 100% Backed
- Developed using advanced Blockchain Technologies
Benefits of Creating Stablecoins
Here we list some of the hidden benefits of stablecoin.
- Though it is still in its beginning times, stablecoins have great prominence in the market. So developing your stablecoin now will be a beneficiary.
- Stable coins are replaceable for fiat currencies.
- Streamlining frequent and P2P expenses
- Quick and moderate settlements for transient laborers
- Assurance from neighborhood money crashes
- Convenient payment instrument
- Accumulates the value
- Significant market volatility
- Provide decent scalability
- Supports decentralization and privacy
- Serves as a value measure
- Liquidity will be high
- High transparency
- Enhanced crypto trades
Right now, stablecoins are exceedingly exploratory. It may be an effective execution in the cryptocurrency world. So now, let us see…
Best Stablecoin Development Services in the Marketplace
By using a stablecoin consulting service, you can have the perfect business strategy to build, deploy, and market your stablecoins.
This service helps you to draft a clear and easy-to-read whitepaper for stablecoin. It covers all the crucial details about the project and also helps investors make the right decisions.
This service helps to create the desired type of stablecoin development. Such as fiat-collateralized, crypto-collateralized, commodity-collateralized, and uncollateralized.
By using this service, you can get the best growth strategy that will help you reach more stablecoin investors. There are many marketing activities like PR outreach, email marketing, social media marketing, and more.
Payment & AML/KYC Services
This payment service can expand stablecoin offerings with multiple payment options. It includes AML/KYC services that allow you to cross-check the profiles of investors.
Community Support Management
There will be a dedicated team that provides community support, instant chats, and crypto forums. The expert team will instantly reply to investors’ queries
If you want to develop a superfine stablecoin, then you need to go for a top-notch stablecoin development company. Now, there will be a question that arises in your mind like…
Where can I Get the Best Stablecoin Development Services?
Icoclone is an award-winning stablecoin development company in the blockchain industry. When it comes to creating a stablecoin, Icolone ranks in the top position. We offer a blockchain-empowered platform that offers consent for the formation of stablecoins. We are well-experienced in offering the best stablecoin development services with the utmost perfection. Icoclone has in-depth experienced developers and an expert team to complete the customer’s project within the given time frame. Many startups and entrepreneurs benefited by using our stablecoin development services.
Our reliable stable coin development services are listed below.
- Fiat-backed stablecoins Development
- Crypto-Collateralized Stablecoins Development
- Non-Collateralized Stablecoins Development
- Multi-Payment Integration
- Automated AML/KYC Services
- Community Support Management
- 100% Backed stablecoin development by assets
If you are a person looking to develop a unique stablecoin. Then connect with us and we are here to assist you right from scratch to deployment at an affordable price.