In the digital asset market, it is possible to increase capital through investments. But if you do not follow a well-thought-out strategy and make impulsive decisions, you can incur losses. You need to understand the principles of the crypto world, be able to competently swap USDT to BNB online, and so on.
Even at the dawn of the development of the cryptocurrency market, it became clear that in order to ensure trading, the market needs a tool that is the equivalent of fiat money. The first in this area were the Omni Foundation, which developed an addition to the Bitcoin network and based on it released the first stablecoin – “Realcoin”, which was later renamed “Tether” (USDT).
Briefly about USDT
Tether is the most popular stablecoin, which accounts for over 65%+ of all transactions on exchanges. The stability of its exchange rate is achieved by providing US dollars. Scandals have flared up around the project more than once, and financial regulators have initiated investigations.
“United States Dollar Tether” or USDT is the very first and most popular stablecoin issued by Tether. The stablecoin appeared on the exchanges in 2015 and since that moment has occupied a leading position among all cryptocurrencies equated to fiat money.
USDT is in third place among all cryptocurrencies with a total capitalization of more than 80 billion US dollars.
The main distinguishing feature of all stablecoins from other cryptocurrencies is the provision of real money. The issue of a stablecoin occurs when funds are received by Tether Limited from individuals or legal entities. Upon receipt of funds, the company issues a similar amount of USDT, and upon request for repayment, it destroys the appropriate number of tokens. Tether Limited has already been accused of USDT unsecurity, but Tether refuted them with the help of audit results.
- Centralized exchanges (CEX) use stablecoin to “bring” fiat to the market without entering into agreements with banks. This eliminates the intermediary in the chain, reduces bureaucracy. In addition, transactions with stablecoins are faster and cheaper than bank transactions. Most of the pairs on crypto exchanges are traded to the digital version of the dollar.
- Thanks to the stablecoin, large investors can enter large sums into the market, and then invest in other coins.
- The platform allows exchanges, payment services, wallets, ATMs to easily use tokens linked to the USD exchange rate (send, store, accept). Moreover, the crypto coin is integrated into most major platforms.
- Each token has 100% provision of the company’s reserves (USD, securities and other assets, debts on loans issued to partners). Pegging to the US dollar: 1 to 1. That is, 1 USDT is equal to 1 USD.
- The platform adheres to the principles of 100% transparency. Information about the status of reserves is updated every day.
- By transferring other cryptocurrencies to a stablecoin, an investor can wait out a period of volatility, falling prices in the market. When the situation stabilizes, he can invest in coins again.
- All types of operations are carried out through a distributed registry. It guarantees security and transparency. In matters of data protection operations, the owners of the platform adhere to international regulations and standards.
- The rate of the stablecoin is stable due to its peg to the dollar. A coin backed by real assets may in the future occupy a fiat niche in countries with unstable economies and a soft national currency.
Briefly about Binance Coin (BNB)
BNB was created with the aim of supporting and developing the entire Binance ecosystem: from the Binance and Binance crypto exchanges.US to the Binance Chain blockchain project, which allows developers to create their own gaming and financial metaverses. The Binance conglomeration also includes: a platform for launching tokens, a crypto wallet, a research laboratory, educational projects and an active charitable direction. The average daily volume of financial transactions passing through Binance is over $2 billion.
Initially, BNB was released in 2017 as an ERC-20 token on the Ethereum network with a limited supply of 200 million coins. After entering the ICO, the number decreased to 100 million. Due to automatic burning, the current stock of cryptocurrency is even lower than the declared one.
There are 3 main values of BNB:
- Initially, BNB was created as a service token that users could use to reduce trading commissions in the Binance ecosystem, but the token became so popular that it itself became an exchange medium and became a full-fledged cryptocurrency.
- The BNB Beacon Chain blockchain has a completely open source code, which attracts crypto enthusiasts to develop their blockchain projects.
- By its nature, BNB is a deflationary cryptocurrency. Binance not only “burns” some of its coins, but also limits the number of tokens available. One of the burnings occurred in April 2022, when Binance destroyed more than 1.8 billion BNB worth the equivalent of $700,000. Burning reflects the use of tokens and the income received on the exchange. By reducing the number of tokens on the market, Binance creates a shortage, which, combined with constant demand, means a higher price for investors.
How Enhanced Returns
Cryptocurrency assets are risky, and not all projects will be successful. But if you invest in the right projects, you can make a lot of money quickly.
The reason why cryptocurrencies are attractive to many people is their decentralization. This means that your money does not depend on central banks or financial institutions, which can protect your funds from freezing or confiscation by state authorities.
If you are considering investing in cryptocurrencies, it is important to conduct research and choose projects that look legitimate and promise to be successful. Also, be aware of the risks associated with such investments, as they are often more volatile than traditional assets.