Is EOSDT a Better Stablecoin than Tether?

Is EOSDT a Better Stablecoin than Tether?

If you are seeking an alternative to Tether (USDT), the EOSDT (EOSDT) stablecoin is worth a look.

To explain, the EOSDT is a decentralized stablecoin they built on the EOS blockchain. A decentralized stablecoin is a cryptocurrency that pays recipients in a fiat currency. In EOSDT’s case the fiat currency is the U.S. dollar.

Consequently, Mr. Market values stablecoins at similar prices to fiat currencies. For example, Coin Market Cap gave EOSDT a Coin Price of 98.98₵ on 14 March 2020.

In addition, Stablecoins can have a lot of value. For instance, CoinMarketCap gave Tether a Market Capitalization of $4.666 billion; a Coin Price of $1.01 and a 24-Hour Market Volume of $98.462 billion on 14 March 2020. Consequently, Tether (USDT) was the fourth most valuable cryptocurrency on that day.

In contrast, Coin Market Cap gave EOSDOT a Market Capitalization of $2.575 billion and a 24-Hour Market Volume of $305.495 million on the same day. Thus, ESDOT was Coin Market Cap’s 514th most valuable cryptocurrency on 14 March 2020.

The Case for EOSDT

Thus, there is  market interest in EOSDT. Hence, investors will ask what is EOSDT?

Essentially, EOSDT is a decentralized stablecoin similar to Tether. The difference they built Tether on the Ethereum (ETH) blockchain while they built EOSDT on the EOSDT blockchain.

EOS is a blockchain controlled by a centralized authority. They design EOS to be more secure and scalable than other blockchains. However, there are allegations EOS is less secure than traditional blockchains such as Ethereum (ETH).

They make EOS more scalable so it will be faster and more flexible. However, EOS’s designers achieve greater scalability by reducing security and encryption. Hence, EOS could be more vulnerable to theft and hacking.

How EOSDT Works

The EOSDT is an interesting stablecoin because they link it to the Equilibrium Stability Fund.

 To elaborate, the Equilibrium Stability Fund is a pool of money that theoretically backs all EOSDT stablecoins. Hence, the Fund provides the money to cover any EOSDT transaction. A smart contract or digital bot, they build into the EOSDT stablecoin automatically draws funds from Stability fund to support EOSDT transactions.

Equilibrium claimed the Equilibrium Stability Fund contained 6.616 million or $20.20 million on 11 March 2020. In detail, the Equilibrium Stability Fund comprises three pools of money that provide liquidity for EOSDT transactions.

EOSDT and the NUT Token

Other design attributes of ESDOT include regulatory compliance, lower collateral requirements, and a design Equilibrium claims is transparent. One aspect of ESDOT I like is that Equilibrium itself uses own capital to finance the Stability Fund. Thus, Equilibrium has faith in EOSDT.

Finally, Equilibrium claims EOSDT distributes revenue streams to staked users through EOSDT smart contracts. In addition, EOSDT uses Equilibrium’s NUT utility token. The Native Utility Token or NUT grants cryptocurrencies and other constructs access to Equilibrium’s decentralized finance (DeFi) framework.

Those the NUT Token serves as a gateway to Equilibrium’s ecosystem. In addition, the NUT serves as an internal currency to facilitate transactions within the Equilibrium ecosystem. Thus, some users will NUT to pay fees in the Equilibrium system.

What Value does EOSDT have?

Finally, Equilibrium has some impressive partners including Bancor, and many EOS developers.  

Thus, EOSDT (ESDOT) trades on Bancor’s liquidity network. Bancor ensures liquidity or cash value to cryptocurrency by making it easy to cash coins out.

Bancor gave EOSDT a Coin Price of 99.57₵, a 24-Market Market volume of $5.312, and a liquidity depth of $5,801 on 14 March 2020. Thus, EOSDT has a little value.

EOSDT Proves Stablecoins are not Stable

However, Bancor’s data shows EOSDT is unstable. For instance, Bancor gave EOSDT a 24 Hour high of $1.33 and a 24 Hour Low of 90₵ on 13 March 2020. Thus, I think Bancor’s numbers show stablecoins are not stable because their prices fluctuate with the markets.

On the positive side, speculators can make money from stablecoins’ instability. On the negative side, Bancor’s data shows stablecoins do not provide the stability that many of their promoters claim.

Consequently, I view ESODT (ESDOT) as a stablecoin to watch. I advise speculators to monitor ESDOT because it could be the next big stablecoin.  

 Originally published at https://marketmadhouse.com on March 13, 2020.