New Study Reveals Best Stablecoin, Why DAI Took The Crown

The decentralized stable DAI, the original to the Maker protocol, could become a major leader in this sector over the coming years. The digital asset was the most stable among the stablecoins in a 9-month period, according to Research Posted by Best Brokers.

A stablecoin is a digital asset whose value is pegged to the US dollar in a parity of 1:1. This concept is controversial in the cryptocurrency industry, as some of the most popular and valuable stablecoins have de-linked and become unstable at some point except for those tokens that society considers “too central.” “.

Users have been searching for a decentralized stablecoin for years, and with the Terra ecosystem failing, DAI may take this place and grab market share of the biggest stablecoins, Tether (USDT) and USD Coin (USDC).

ETH price is moving sideways on the 4 hour chart. source: ETHUSDT TradingView

DAI is more stable than any other stablecoin

The study used data from Dune Analytics and explored the popular stablecoins BUSD, DAI, FRAX, LUSD, USDC, and USDT. The research concluded that FRAX has seen the lowest price deviation over the past nine months.

Digital assets have been stable at 99.75% of these periods, followed by DAI at 95.73%, and USDC at 99.72%. LUSD was the most volatile with a 0.5% deviation from its one-dollar peg at 53% of the nine-month period.

Among the stablecoins in the study, DAI, BUSD and USDC never deviated from $0.995 to the downside and $1,005 to the upside. As shown in the chart below, Tether (USDT) has been the largest stablecoin with the largest price deviation over the past nine months at 0.78%.

DAI Ethereum ETH ETHUSDT Chart 1
Source: BestBrokers

However, DAI ranked first in the lowest deviation from its currency peg. The decentralized stablecoin has fluctuated 0.5% from its normal value, 0.27% of the nine months examined by the study.

Thus, DAI is the most stable stablecoin which is only deviating to $0.99640185 from its 1:1 value with the US Dollar. USDC is closely following the second position with a deviation of $0.9962163333. Tether showed the worst performance in the search with a deviation of $0.97, as shown in the chart below.

DAI Ethereum ETH ETHUSDT 2 . Chart
Source: BestBrokers

Alan Goldberg, Market Analyst at BestBroker, stated the following about their findings, and DAI’s potential to attract institutions based solely on their stability:

DAI stability is great. A lot of adopters prefer to own non-volatile assets as they already have to deal with competition, inflation, market conditions, etc. With that in mind it makes DAI a very dangerous competition to the likes of USDC.

Stable coins have been a controversial topic in cryptocurrencies since the collapse of LUNA and TerraUSDT. However, the demand for a stable, decentralized exchange remains high with DAI poised to continue gaining prominence in this sector. Goldberg added:

Although the supply of DAI is low, compared to USDC, USDT and BUSD, it is still large and makes it usable by major companies. When we consider both the lower deviation and the more stable price, DAI can be considered the most stable coin of the past nine months and a serious contender to compete with other “big” stablecoins.

Leave a Comment

Your email address will not be published. Required fields are marked *