With the development of Web 3.0, stablecoins have become a crucial part of the decentralized market. Currencies, such as USDT and USDC served as a safe harbor amid volatility reigning in the market. For the most part, they seem like the most stable option, less affected by market changes.
Another reason for their popularity is the ease with which users can withdraw or exchange stablecoins for dollars. As long as cryptocurrency isn’t universally accepted in stores and online, there’s a place for stablecoins.
We’ve come to know stablecoins as a convenient and reliable option and, naturally, the most popular ones are tied to USD.
The Reality Behind Stability
Stablecoins are considered to be the safest way to keep currency. While volatility may be profitable for experienced users and traders, average crypto aficionados often need something that can withstand a crisis or a market crash. Unfortunately, as many of us have recently learned, this isn’t always the case.
As a result of the actions of established financial institutions, USDC, one of the most popular stablecoins, lost its peg to USD. This happened on March 10, after U.S. authorities took over SVB. The price of USDC dropped below 87 cents, causing an unprecedented deposit run.
This event illustrates how even without any actions from Circle, their USD coin started losing its value. It also reminds users that it’s not always possible to predict price changes ahead of time, even with a currency that’s supposed to be unbreakable. In this way, cryptocurrency still reminds us too much of fiat.
Repairing the Old Model
Having vast experience in financial markets and operations, DIB Yield team wasn’t caught off guard by the USDC crash. It’s not entirely unreasonable to expect this from any existing stablecoin, since the model has so many issues. They may be rarely discussed, but at times like this they become quite obvious.
Algorithmic stablecoins can unpeg at any given moment, plummeting in times of high volatility. Stablecoins backed by fiat are too dependent on centralization and risk being affected by outside decisions.
In other words, the existing stablecoin model has flaws. And those flaws tend to play a part in how much money every user has in their crypto wallet.
This is why DIB Yield is introducing its own model Stablecoin 2.0.
What is Stablecoin 2.0
Stablecoin 2.0 has been in the works since 2022. It is an option-based insurance derivative. With a brand new mechanism, Stablecoin 2.0 is designed specifically to eliminate the issues that plague the existing model. An MVP of the coin will be released soon and the main goal behind this project is to revolutionize the way stablecoins interact with fiat.
To seed fund Stablecoin 2.0, we are launching DIB Yield — a yielding platform based on the Arbitrum blockchain. DIB Yield is built by a group of independent developers in partnership with ApeSwap. This platform is absolutely safe to use, smart contracts are audited and tested by the team with DeFi security expertise.
DIB Yield allows users to find projects with the best APY interest rates, stake, yield, and get rewards. With its utility $DIB token, users will be able to interact with the platform, and the best part is no withdrawal or reward fees.
DIB Yield launched on Arbitrum on April 11 2023.
You too can become a part of the future of stablecoins. Start by joining DIB Yield and follow our updates!