June 2022 guide to earning with USD Coin

June 2022 guide to earning with USD Coin

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Jonathan
Jonathan

An editor at Coincrop


17 Jun 2022 | 21 min read
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C

ryptocurrencies are notorious for their great unpredictability, as market values may surge or fall in a couple of hours, much less even days and weeks. Cryptocurrencies like USD Coin attract a market where most individuals are attracted to the promise of a nonvolatile cryptocurrency.

Now, what exactly is it? Can it compete with Tether and other similar cryptocurrencies? How does it function? Is it a good investment? Let us explore.

In this guide:

What is USD Coin?

As the title implies, USD Coin (USDC) is a virtual currency whose price is linked to the US dollar. It is a stablecoin, which means that one USD Coin must always be worth $1. USD Coin is the second biggest stablecoin at the moment. Tether and USDC account for 80 percent of the worldwide stablecoin market valuation. It also has the fourth greatest market cap of any cryptocurrency.

USD Coin is intended to reduce price fluctuations by guaranteeing that each piece of USDC gets generated only if a matching US Dollar gets placed into a reserve bank account. Its principal function is as a method for investing and hedging in international cryptocurrency financial markets. Moreover, USD Coin gets used for loans, transactions, investments, and other uses under financial contracts like commodity derivatives, insurances, and security mechanisms.

In a word, USD Coin is a system that tokenizes US dollars and makes them more accessible via the online and open blockchains. Furthermore, people can easily convert USD Coins to USD at any moment. Putting US dollars on the blockchain enables assets to be quickly moved anywhere around the globe and provides much-needed security to digital currencies. It also creates new chances for trading, financing, risk-hedging, and other activities.

What is the history of the USD Coin?

The Centre consortium, a collaboration involving Circle and Coinbase, created USD Coin. Centre created the technologies and the governance structure, whereas Circle and Coinbase were the initial commercial suppliers of USD Coin.

Circle announced the launch of USDC, fiat money-supported stablecoin, in September 2018. USD Coin was created in collaboration with Bitmain, a renowned bitcoin technology producer. It's worth mentioning that in May 2018, Bitmain headed a $110 million financing investment governed by Circle. The corporation promoted USDC as a much more controlled substitute for other cryptocurrencies.

USDC was published on the world's largest trading exchange, Coinbase. As a result, the business established CENTRE as an entirely owned corporation to control the stablecoin. It aided in fast bootstrapping the viability of a stablecoin. The USD Coin's appeal grew further as it became offered for trade-in over 80 nations. Circle and Coinbase announced a significant update to USDC's technology and smart contracts in 2020. These improvements simplify applying USD Coins for daily transactions, business, and peer-to-peer operations.

How are USD Coins created?

Circle ensures that one US dollar backs every USD Coin. Tokenization refers to the procedure of converting US money into USD Coins. The tokenization of US money occurs in three stages:

A user deposits US dollars into the asset's bank account.

The issuer creates the corresponding quantity of USD Coins using a smart contract.

The freshly minted USD Coins are delivered to the user, while the replaced US dollars are kept in reserve.

Exchanging USD Coins for US Money is as simple as minting the coins. However, the procedure is reversed. The developers of the USD Coin are compelled by law to maintain complete openness with the banking institutions that hold US dollar reserves. As a result of these restrictions, USD Coin providers are obligated to declare their USDC assets regularly.

Assume you want to tokenize your US money or exchange USDC for dollars. You can do it by creating a Circle profile in such an event. There is no price for tokenizing or exchanging while utilizing Circle's service.

How can the USD Coin hold its value?

The present prominence of the USD Coin originates from its extensive utility and cheap transaction costs, and the efficiency with which people can trade it for other cryptocurrencies. The USDC is guaranteed by dollar reserves worth roughly as much as the USD Coin, which is kept in separate accounts with US-controlled banking institutions. Reputable accounting companies attest to these accounts.

USD Coin is the only virtual currency completely securitized by US dollars and adheres to a strict protocol to preserve its 1:1 equilibrium with the US dollar. Every USD Coin is an ERC-20 token that can be redeemed for $1 at any moment by CENTRE, which acts as a non-profit Stablecoin provider for numerous currency pairings throughout many blockchain systems.

How do I purchase USD Coins?

It simply requires a little time to get going if you're willing to acquire USD Coin and accept the chances of cryptocurrency trade. To purchase USD Coin in the United States, you must utilize a cryptocurrency exchange. A crypto exchange is a website where you may purchase and trade cryptocurrency. Considering its involvement in establishing this stablecoin, Coinbase is among the most passionate exchange platforms that provide USDC.

To choose the most refined crypto exchange platform for your purposes, you should compare many sites. User interfaces, prices, and policies vary significantly between exchanges. A little study might make you feel more at ease with the platform you select. You're prepared to purchase USD Coin after choosing the ideal exchange platform. Although USDC's support has maintained its price constant thus far, it is still a cryptocurrency and may lose value in the future. Ensure always to put money into your account that you won't require for regular costs or emergencies.

You may purchase on your preferred exchange in a few simple steps:

Input the quantity of USD Coin you wish to purchase.

Choose a purchase type (market, limit, etc.).

Finish the transaction.

You can purchase USD Coins on a variety of cryptocurrency exchanges. Kraken and Gemini are two other exchanges where you may convert US money to USDC. Because USDC is a stablecoin, it's not really "paired" in the way other crypto pairings are. However, many platforms allow users to buy different cryptocurrencies, such as Bitcoin and Ethereum with USD Coin. Bitstamp, KuCoin, and Binance.US are among them. If you wish to utilize your USDC to buy different cryptocurrencies such as Litecoin or Dogecoin, you may do so on KuCoin.

How do I store USD Coins?

USD Coin creates its wallet, which you may get from their website and use to keep USD Coin on your device. Users can keep USD Coin in their Circle Profile. Because USD Coin is an Ethereum token, you may store it in an Ethereum-suitable wallet, such as Coinbase Wallet.

For ultimate security, you may keep your bitcoins on specialized hardware storage, like a TREZOR or a Ledger Nano X. These hardware wallets, known as cold storage or wallets, can occasionally resemble USB drives. You keep your cryptocurrency on these disks after downloading it from the internet.

If you don't want to purchase hardware storage, you might use a mobile wallet like Coinomi, Atomic Wallet, or Jaxx to store various coins with increased protection. Paper wallets allow you to generate a mix of public and private keys and QR codes, keeping your information offline and safe from prospective hackers. You may also keep your USD Coin by downloading crypto wallet programs like Exodus or Vibes straight to your smartphone or computer.

Most cryptocurrency exchanges provide consumers with a built-in crypto wallet via which they may maintain their crypto assets on the platform. Kraken and Gemini, for instance, both provide wallets.

What are the benefits of USD Coins?

The significant benefit of the USD Coin is that it allows consumers to purchase and trade different cryptocurrencies without needing to transfer fiat cash in and out of exchange platforms. You can trade USDC 24 hours, seven days a week, and complete the transactions in seconds. Transaction prices are minimal, enabling it to be both cost-effective and time-efficient to utilize.

USD Coin is a fantastic product since it is simple to produce and redeem, and it integrates seamlessly with the current world banking markets. Consequently, clients can utilize it to connect traditional electronic dollars and virtual currency dollars as an effective route. It also allows for significantly speedier capital transfers throughout diverse geographical domains, particularly in comparison to conventional wire transfers.

There are still disadvantages to utilizing USD Coin. For one thing, it has no price increase. Investors must also be conscious of the regulatory environment in which cryptocurrencies and stablecoins operate. Governmental prohibitions against such crypto assets, according to crypto specialists, might have a detrimental effect on their future.

Should I invest in USD Coin?

Because USD Coin is a stablecoin, it will not create any investment returns. Since there is no predicted value growth with this currency, the appeal of this cryptocurrency is mostly about its utilization. Trading in USDC is like stowing US dollars beneath your bed. The value of your asset will not be more than the corresponding currency.

However, there are various ways to benefit from USD Coin. You may earn passive money by lending it to other cryptocurrency investors. Several trading platforms will offer you profit in exchange for lending the USD Coin. No investment is without uncertainty, and by receiving an income on USDC, you are taking a slight chance on borrowers.

Furthermore, the primary purpose of USD Coin is to assist companies and people in transferring cash more efficiently and cost-effectively by removing the necessity of conventional intermediaries such as banks and offering a reliable platform.

Stablecoins, such as USD Coins, are essential because it enables you to keep cash online at a consistent price with no need for a financial institution. Individuals in countries where the native money is prone to inflation often choose the USD Coin. The USD Coin enables anybody globally to keep the world reserve currency in US dollars.

USDC could be seen as a secure, more reliable option to go into the stablecoin market than other cryptocurrencies. However, you must evaluate present economic factors before investing. When purchasing USD Coin, consider your financial objectives and whether the risks justify the purchase.

How much can I earn from USD Coin?

There are a number ways in which you can earn a return from your USD Coin depending on your risk appetite and investment complexity.

The following table lists centralised saving organizations that will pay a rate of interest on USD Coin assets on a flexible terms basis:

OrganizationDeposit assetsReward assetsAPY Rate
Cashaa

Saving

Deposit USD CoinUSD Coin (USDC)

Earn USD CoinUSD Coin (USDC)

18.0% - flexible

Pintu

Saving

Deposit USD CoinUSD Coin (USDC)

Earn USD CoinUSD Coin (USDC)

15.0% -

0-10000 USDC, flexible

Trofi

Saving

Deposit USD CoinUSD Coin (USDC)

Earn USD CoinUSD Coin (USDC)

14.0% - flexible

Pillow

Saving

Deposit USD CoinUSD Coin (USDC)

Earn USD CoinUSD Coin (USDC)

13.7% - flexible

MyConstant

Saving

Deposit USD CoinUSD Coin (USDC)

Earn USD CoinUSD Coin (USDC)

12.5% - flexible

CoinLoan

Saving

Deposit USD CoinUSD Coin (USDC)

Earn USD CoinUSD Coin (USDC)

12.3% - flexible

Yield App

Saving

Deposit USD CoinUSD Coin (USDC)

Earn USD CoinUSD Coin (USDC)

12.0% - flexible

The following table lists centralised saving organizations that will pay a rate of interest on USD Coin assets on a fixed terms basis:

OrganizationDeposit assetsReward assetsAPY Rate
OKEx

Saving

Deposit USD CoinUSD Coin (USDC)

Earn USD CoinUSD Coin (USDC)

500% - fixed (5 days)

Cashaa

Saving

Deposit USD CoinUSD Coin (USDC)

Earn USD CoinUSD Coin (USDC)

18.0% - fixed (365 days)

AAX

Saving

Deposit USD CoinUSD Coin (USDC)

Earn USD CoinUSD Coin (USDC)

14.5% - fixed (360 days)

Trofi

Saving

Deposit USD CoinUSD Coin (USDC)

Earn USD CoinUSD Coin (USDC)

14.5% - fixed (30 days)

Cashaa

Saving

Deposit USD CoinUSD Coin (USDC)

Earn USD CoinUSD Coin (USDC)

14.0% - fixed (180 days)

AAX

Saving

Deposit USD CoinUSD Coin (USDC)

Earn USD CoinUSD Coin (USDC)

13.3% - fixed (180 days)

BTSE

Saving

Deposit USD CoinUSD Coin (USDC)

Earn USD CoinUSD Coin (USDC)

12.5% - fixed (365 days)

Conclusion

While the present degree of Bitcoin unpredictability puts the prospect of its widespread acceptance for daily payments uncertain, stablecoins like USD Coin have the potential to improve the scenario. USD Coin is an excellent solution with several potential applications and a promising future.

USD Coin FAQs

It's impossible to offer an accurate figure. In concept, the amount of USD Coin that may exist is infinite. More coins are minted to meet the growing demands whenever anyone decides to buy one with their hard-earned money. However, variables have also contributed to USD Coin's explosive growth in recent years, particularly in 2020. Among them is the unexpected and rapid surge of interest in decentralized transactions.

Although there may be some uncertainty concerning the cryptocurrency's holdings, it is. Conduct your study, keep in mind that cryptocurrencies can crash, and never invest heavily that you can't recover from if it loses.

USDC is preferred to Tether since the reliability of Tether's security was in doubt in the past. It's better to continue with the USD Coin to allow investors to sleep a good night. Furthermore, services such as Voyager pay a significant return on USD Coin, whereas less return is offered on Tether. It simply bends the scales even more in support of the USD Coin.

USD Coin is a fiat asset-backed stablecoin, and all programs in the same type operate in the same way with only slight variances. Tether, notorious for rejecting to undergo a genuinely public audit, and Digix Gold, whose worth is related to gold, are two standouts.

The remainder of the fiat asset-backed stablecoins are released regularly and are guaranteed by US dollars. The primary changes between them are their pricing structures and various related stakeholders, but the economic concept remains primarily unchanged.


Jonathan

Jonathan

An editor at Coincrop
View articles

Jonathan is a Crop Crop staff writer based in the UK, covering the best rates for cryptocurrency earning and borrowing products. When not at work, he's likely sailing.


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