The Ethereum blockchain is not the only game in town in stablecoins. Several companies are developing stablecoins for the EOS blockchain.
EOS is an Ethereum alternative that developer Block.One intends to be faster and more scalable than established blockhains. For instance, the EOS Network Monitor estimates the EOS blockchain was processing between 41 and 58 transactions per second (TPS) on 19 September 2019.
Importantly, the EOS Network Monitor claims EOS’s can process up to 3,996 TPS. In contrast, Blockchain.com estimates Bitcoin’s (BTC) blockchain could only process 3.767 transaction per second (TPS) on 19 September 2019. Consequently, Hacker Noon’s Taygun estimates it can take an hour to process a Bitcoin transfer.
Meanwhile, the cryptocurrency blogosphere consensus is that the Ethereum blockchain can process 15 to 25 TPS. Additionally, Taygun claims it could take six minutes to process an Ethereum (ETH) transfer.
Why Stablecoins Need to be Scalable
Therefore, it could take an hour or longer to process a Bitcoin stablecoin transaciton and over six minutes to process an Ethereum stablecoin transactions. Under those circumstances, you could be standing at the cash register for over an hour waiting for a platform to convert your cryptocurrency payment into spendable cash.
Frankly, I cannot picture any merchant accepting a payment method that will cause customers to stand in line for hours. Thus, lack of scalability defeats the whole purpose of stablecoins.
To explain, the idea behind stablecoins is to create a blockchain instrument that makes near instant payment in fiat currencies. They design the Gemini Dollar (GUSD) to release a US dollar from a trust account at State Street Bank when you spend it.
I think a stablecoin will need to complete a transaction in less than five seconds for most merchants to accept it. McDonald’s (NYSE: MCD) is unlikely to accept stablecoins at the drive-thru if it takes a half hour to complete a payment.
Most blockchains; however, are slow because all the encryption and security measures limit the capacity. Scalable blockchains, like EOS offer a higher TPS speed because their capacity is greater.
How Much could an EOS Stablecoin be worth?
Therefore, scalability could speed the mass adoption of stablecoins. In particular, scalability could help big banks like BNY Mellon (NYSE: BK), JPMorgan Chase (NYSE: JPM) and Goldman Sachs (NYSE: GS) bring out their own stablecoins.
Mr. Market gives stablecoins some values. For example, Tether (USDT); a variant of Tether that pays in US Dollars was the sixth most valuable cryptocurrency on CoinMarketCap on 19 September 2019.
For the record, the USDT had a Market Capitalization of $4.115 billion, a 24-Hour Market Volume of $23.603 million and a Coin Price of $1 on that day. CoinMarketCap based those prices on a Circulating Supply of 4.108 billion USDT and a Total Supply of 4.208 billion USDT.
However, CoinMarketCap offered no estimates for Tether CNH (CNHT) on 19 September 2019.Tether CNH is a Tether variant that pays in the Chinese Yuan. My guess is the Tether CNH has little value because the People’s Republic of China bans foreign cryptocurrency trading platforms, The South China Morning Post reports.
The People’s Bank of China (PBOC) could allow Tether CNH in the Middle Kingdom; if rumors it plans to test a central bank issued cryptocurrency with Tencent Holding (OTCMKTS:TCEHY) and Alibaba (NYSE: BABA) are true. Bloomberg claims PBOC Payments Department Deputy Director Mu Changchun says a PBOC cryptocurrency is “close to being out.”
In addition, CoinMarketCap did not report on two other Tether variants, the Tether Euro (EURT); which pays in Euros, and the Tether Yen (JPYT) which tracks the Japanese Yen.
Presently, there only seems to be a market for USD stablecoins. However, I think there will be a demand for Euro stablecoins soon. On the other hand I cannot tell if there is a market for Yuan or Yen stablecoins.
Some EOS Stablecoins to Mull Over
However, there are a few EOS stablecoins that you can mull over.
First, Tether (USDT) is now available on EOS through a smart contract from EOS Canada, a press release indicates. To elaborate, a smart contract is a digital robot or dcentralized app (DApp) they build into a stablecoin.
A smart contract performs a specific action such as converting EOS to US Dollars. Thus, we can consider USDT an EOS stablecoin. However, they have not announced EOS versions of Tether CNH, the Tether Euro, or the JPYT.
Second CarbonUSD (CUSD) is an EOS stablecoin that CoinMarketCap does not track. However, CarbonUSD is part of the Bancor Liquidity Network which gave CUSD a Coin Price of $1, a 24-Hour Market Volume of $2,482, and a Liqudity Depth of $23m955 on 19 September 2019.
Third, VIGOR is a proposed US Dollar EOS stablecoin that is still in development. No date for VIGOR’s release is available but the team behind VIGOR claims they have a better DApp than EOS’s developer block.one.
The oddly named PIZZA-USDE is a foreign effort. The Pizza Team is developing an EOS based stablecoin they plan to peg to the US dollar, a white paper claims. However, details about PIZZA-USDE are scarce because its site is not in English.
An EOS Stablecoin you can Buy Right Now
The EOSDT had a Market Capitalization of $1.802 million, a 24-Hour Market Volume of $25,569, and a Coin Price of $1 on that day. There was a Circulating Supply of 1.8 million EOSDT and a Total Supply of 5.402 million USDT on September 19, 2019.
Currently, you can generate EOSDT through the Equilibrium website. Thus you can buy and spend the EOSDT right now. Hence, EOSDT has an advantage over its rivals, although I think Equilibrium will have a hard time competing with Tether.
At present, CUSD, Tether, and EOSDT are the only EOS stablecoins that have value because you can buy them. Speculators need to watch the EOS stablecoins because I think they could have a lot of value because of scalability.
Originally published at https://marketmadhouse.com on September 19, 2019.