Community engagement plays a pivotal role in the world of web3, fostering collaboration and building a sense of ownership among early users. Link3 has been at the forefront of this movement, especially with its Fan Club loyalty program, where community members earn rewards for contributing to the Cy

# **What makes a “Good” Stablecoin?**

User Confidence is undeniably important, especially seeing the recent collapse of protocols (LUNA/UST) and the most recent FTX collapse, in just matters of days.

Some of it is due to fundamental reasons or speculated breaches, we do feel that a huge part is also the confidence in customers/users in the protocol/exchange itself, and we feel this also applies to Stablecoins.

We have seen exchanges quickly coming out to let users know that they are doing Merkle-Tree Proof of Reserves around the time FTX was said to be insolvent.

![](https://ccgateway.infura-ipfs.io/ipfs/bafybeifjby3s337essc64diexoq453dyocit2aofjktouhfjahkmod3a3a)

_Source: CoinMarketCap Market Cap_

[_https://twitter.com/cz\_binance/status/1590055819416330240_](https://twitter.com/cz_binance/status/1590055819416330240)

In Stablecoins, some due diligence must be done by users themselves to identify what they consider a good, yet safe Stablecoin to use.

Hence, we have put together a few key points and analysis of what we think you should take note of to identify confidence in the Stablecoin and also help in reducing the odds of you getting “rugged”.

### 1. **“Battle History”**

Those who have been in the Crypto Space for a few years will know that “battle-tested” tokens which have survived various conditions of the Crypto Market and are still “surviving” normally means they are doing something right.

In such a volatile environment, if a Stablecoin has yet to collapse _(Hint!: UST is not one of them!)_ and still holds its peg, normally means that there is confidence in that Stablecoin which suggests that it might be a “better” Stablecoin.

We think that the longer a Stablecoin stays in this space without collapsing, the more credibility they have.

![](https://ccgateway.infura-ipfs.io/ipfs/bafkreigekhery65ipelqm5ervli5wtg6f5qqvsvrl6ftoxjhleq6dd3gga)

_Source: CoinMarketCap Market Cap_

[_https://coinmarketcap.com/view/stablecoin/_](https://coinmarketcap.com/view/stablecoin/)

Therefore we can see that we have a clear winner, which is USDT.

It has been the longest standing stablecoin, and has been through various market conditions but is still trading at peg, which shows that there is user confidence in the stablecoin.

_**“Why isn’t anybody talking about this?!”**_

![](https://ccgateway.infura-ipfs.io/ipfs/bafybeibvrndsonrsw2fgcx6fvclww46w5shkj2fg6yyczqeju7oda32qvu)

Source: Youtube // [https://twitter.com/trondaoreserve/status/1590691862813478912](https://twitter.com/trondaoreserve/status/1590691862813478912)

_Did you know that when Tether depegged recently after the collapse of FTX, TRON DAO attempted to defend the peg?_

### 2. **Utilization based on Chains**

Having some substantial amount of flow into various chains could also be a good way to see how utilized these tokens really are. Generally we want to see these tokens on more chains rather than just solely on one chain.

We have mainly referred to the data on DefiLlama.

Source: [https://defillama.com/stablecoins](https://defillama.com/stablecoins)

In the data below, we have only included chains with more than _**$1,000,000**_ worth of Stablecoin flows.

![](https://ccgateway.infura-ipfs.io/ipfs/bafkreifi53bxx4hun7ye3j6a2bnspoqjtnyvyt4vz7raunyntnc2rhqkki)

In this case, we can see that the USDC and USDT is still being used on most chains.

_**“Why isn’t anybody talking about this?!”**_

![](https://ccgateway.infura-ipfs.io/ipfs/bafybeieprjv36476cfpjnsxatopj765fmxwd25nxqrmwmbfpwmkl2iks7e)

Source: Twitter // [https://twitter.com/novogratz/status/1590702794163781632](https://twitter.com/novogratz/status/1590702794163781632)

_Did you know CEO of Galaxy Digital,Mike Novogratz fell for a fake Twitter account and went on CNBC to say El Salvador may have stored their Bitcoin with FTX which was insolvent?_

### 3. **Utilization Rate**

The idea behind the Utilization Rate is to see the usage of each Stablecoin in comparison to its Market Capitalization.

A Stablecoin with a higher Utilization Rate when compared to others is generally a good sign that the Stablecoin is being “used”.

A Stablecoin being actively “used” especially during periods of uncertainty, generally shows confidence in the Stablecoin.

Therefore to calculate the Utilization Rate, we will simply take the 24H Volume / Market Capitalization.

_The Utilization Rate will be higher than usual, as due to the recent insolvency of FTX/Alameda as well as possibly many entities not revealed yet, the fear in the market will increase the demand for Stablecoins._

_We think that this is a good time to compare these Stablecoins, as in periods of stress, we can see which Stablecoins users truly feel is “safe” to transact in._

Higher Utilization means higher liquidity, and also suggests that users are actually using that Stablecoin to do transactions.

Therefore if you are trading more on Centralized Exchanges, you might want to place more importance in the consideration of a higher utilized stablecoin on Centralized Exchanges, and likewise the same case for Decentralized Exchanges.

However, we also put together a combination of the Utilization Rate on Centralized + Decentralized Exchanges to get a good overview of the whole picture.

We will be referencing the volume from CoinMarketCap.

_Source: _[_https://coinmarketcap.com/view/stablecoin/_](https://coinmarketcap.com/view/stablecoin/)

_All figures are approximate._

![](https://ccgateway.infura-ipfs.io/ipfs/bafkreiat2pfihd7k3kcifl7ze6jx7xxcio7zfqmkiey3qxmhiu2y4hqldm)

_Source: CoinMarketCap Market Cap_

[_https://coinmarketcap.com/view/stablecoin/_](https://coinmarketcap.com/view/stablecoin/)

3.1. Stablecoins Utilization on Centralized Exchanges

![](https://ccgateway.infura-ipfs.io/ipfs/bafkreidcfpguxtkz734hxwy5alskjnwtfqpu4kg2l6nprq4p3ba3qvfuse)

There are some Stablecoins such as FRAX which has too low of a Utilization Rate which is why it's not included in the table, as it is clear that it is not being utilized much on centralized exchanges.

![](https://ccgateway.infura-ipfs.io/ipfs/bafybeihs3qooc74ai7uny2r5uc4auvvzb6jyqmxrulskaavvlsmgqes5ba)

_Source: CoinMarketCap Market Cap_

[_https://coinmarketcap.com/currencies/frax/_](https://coinmarketcap.com/currencies/frax/)

It is quite clear that USDT is the clear winner in terms of utilization on Centralized Exchanges, with the runner up being BUSD.

3.2. Stablecoins Utilization on Decentralized Exchanges

![](https://ccgateway.infura-ipfs.io/ipfs/bafkreiejeanu34m2v5egrlotpk3hkrhqprrotkhdqq3pmwl4kjcjniud3y)

For Decentralized Exchanges, DAI appears to have the highest Utilization Rate and this is followed by USDC.

3.3. **Total Stablecoins Utilization on Centralized & Decentralized Exchanges**

![](https://ccgateway.infura-ipfs.io/ipfs/bafkreihyev6oxoqpalhxbrnklidmv4vasoppmofqymhxqstj2ibol5xwxi)

In general, it seems that the Top 4 Market Capitalization tokens also has the highest utilization rate for CEX + DEX combined.

Hence, as mentioned above, it would depend on whether you trade more on CEX or DEX and assess which Stablecoin has a higher utilization rate there.

![](https://ccgateway.infura-ipfs.io/ipfs/bafkreie4h6wm4cznzmpde2g7obnm32jqh7xxrpolx263r45l4luaxwglvi)

We can see that in general the utilization rate for stablecoins is generally higher in CEXs, and although another factor could be due to the native token being commonly used within trading pairs for each network/chain for DEXs.

However, these are the top 3 Stablecoins for CEX and DEX _(depending where you trade on)_ to be considered as “better” Stablecoins in terms of just looking at Utilization Rate.

_**“Why isn’t anybody talking about this?!”**_

![](https://ccgateway.infura-ipfs.io/ipfs/bafybeif4nl5fubjmxvm4kcalcdovlvpi4qv6hmuu6orldtcnu2ihd5v3he)

Source: Twitter // [https://twitter.com/CryptoHayes/status/1590320645639766016](https://twitter.com/CryptoHayes/status/1590320645639766016)

_Did you know many memes (In this case the Solana Phone) were made about SOL since the recent fall of Alameda and FTX, as SBF was known for being a big advocate of SOL?_

4. **Stablecoins Decentralization Breakdown**

Did you know that Stablecoins issuers can freeze your Stablecoins even if it is in your own wallet? “Your keys, your coins” does not apply in this case!

Although some of it is due to legitimate reasons, generally this shows the stablecoin is not exactly “Decentralized”.

Hence, to get a good idea of how Decentralized a Stablecoin is, we are going to look at whether the issuing entity has any past history of freezing funds/wallets.

![](https://ccgateway.infura-ipfs.io/ipfs/bafybeihpvowkshn7i7ljy2g53sancwhdyfcq7tuoolre4ktj54sayt6xo4)

Hence, in this case although we do not have a clear winner, we feel that DAI, when compared to the rest, is a good option for users who would prefer to have full custody of their Stablecoins.

Do note that Decentralization covers a wide range of areas besides the freezing of funds, and this is just one way to look at it.

_**“Why isn’t anybody talking about this?!”**_

![](https://ccgateway.infura-ipfs.io/ipfs/bafybeienf3izmtefjms4nudrq23zs45sr5i26oe4brnljwqwldh5sr42hu)

Source: Twitter // [https://twitter.com/zhusu/status/1590189388721704960](https://twitter.com/zhusu/status/1590189388721704960)

_Did you know after FTX/Alameda’s collapse, Su Zhu of 3AC broke silence on Twitter, possibly hinting at a comeback?_

### 5. **Stablecoins Peg Analysis**

Please note that the data below is from Defillama. If you trade on centralized exchanges, or any protocol that relies on its own price feeds, it is recommended you also take a look at that exchange/protocol you are trading on to look for the peg history. (Source: [https://defillama.com/stablecoins](https://defillama.com/stablecoins))

When we state it is sorted by Most to Least “Safest”, we take the assumption that being closer to Peg is generally “safer”. Being above peg might not exactly be favorable to users, depending on which side of the trade you are on.

![](https://ccgateway.infura-ipfs.io/ipfs/bafkreifi53bxx4hun7ye3j6a2bnspoqjtnyvyt4vz7raunyntnc2rhqkki)

Generally we can see that the top 2 Stablecoins USDC and USDT have been able to keep their peg on chain, which shows user confidence in them.

_**“Why isn’t anybody talking about this?!”**_

![](https://ccgateway.infura-ipfs.io/ipfs/bafybeicwficscma5j7o23obw2mtrcn2lbf3sacqatxsv7pui3ikboyo7xa)

Source: Youtube // [https://www.youtube.com/watch?v=YimBTM7kwjc](https://www.youtube.com/watch?v=YimBTM7kwjc)

_Did you know after FTX was said to be insolvent,  Martin Shkreli and Do Kwon came on a Crypto Youtube Livestream with the former telling Do Kwon that "jail isn't that bad"?_

# **Food for Thought**

More Decentralized Stablecoins has historically shown greater instability, and has a higher chance of crashing in a black swan event.

Centralized Stablecoins are supposedly “safer” in terms of keeping its dollar value, but there is always the probability that the issuing entity can freeze the funds.

For us at HashBrown Research, we would prefer to use DEXs over CEXs, hence what we would consider a “good” Stablecoin  based on the Utilization Ratio on DEXs.

We also would be more inclined to use DAI, although the collateralization is a concern, we believe that with future innovation, maybe DAI can come up with a different collateralization system so as to minimize the dependency of a centralized stablecoin such as USDC.

_Do you look at any data when choosing to use a Stablecoin?_

_Feel free to connect with us on our Socials as we would like to hear your thoughts!_


What makes a “Good” Stablecoin? User Confidence is undeniably important, especially seeing the recent collapse of protocols (LUNA/UST) and the most recent FTX collapse, in just matters of days. Some of it is due to fundamental reasons or speculated breaches, we do feel that a huge part is also

A Deeper Dive into Stablecoins

🌐 Only 48 Hours Left! Hurry Up for the ZetaChain Testnet Exploration Contest 🚀


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Hurry up, the clock is ticking! Dive in and discover the limitless possibilities of ZetaChain before time runs out. ⏳




#ZetaChain #TestnetContest #BlockchainExploration #Web3

🌐 Only 48 Hours Left! Hurry Up for the ZetaChain Testnet Exploration Contest 🚀 Are you ready for an exciting adventure into the ever-expanding ZetaChain ecosystem? Don't miss out on your chance to explore Zetablockchain apps and be a part of something big! 🌟 🔗 Explore now: https://app.

🌐 Only 48 Hours Left! Hurry Up for the ZetaChain Testnet Exploration Contest 🚀

Community engagement plays a pivotal role in the world of web3, fostering collaboration and building a sense of ownership among early users. [Link3](http://link3.to/) has been at the forefront of this movement, especially with its Fan Club loyalty program, where community members earn rewards for contributing to the CyberConnect ecosystem. Since its launch in March 2023, an impressive 1M+ unique web3 wallets have participated in FanClub.

As we embark on a new chapter, we'd like to announce that Fan Club will be discontinued on September 13th, 2023, at 9 AM UTC. A snapshot of Fan Points will be taken simultaneously. All Fan Points that have not been used to redeem raffle tickets will be migrated to CYBER Community Rewards Season 2. The Mystery Box [page](https://link3.to/mystery-box) will be discontinued as well. Stay tuned for more details about the point migration and what Season 2 has to offer!

Link3 will undergo an upgrade and full integration with CyberConnect Protocol V3 shortly after the points migration on September 13th. You can use your CyberAccount on Link3 for various engagements, including minting of W3ST. Please note that all W3STs collected with an EOA wallet will be linked to your CyberAccount. For answers to frequently asked questions about CyberAccount, please visit [here](https://link3.to/cybertrek).

Link3 Update: Fan Club Points Migration & Protocol v3

**⚡️ ROUTER PROTOCOL JOINS SCALAR DAO AS CONTRIBUTOR ⚡️**

**Scalar DAO is absolutely thrilled to welcome @routerprotocol as our valuable Contributor in building a robust interoperability layer on the DAO, bootstrapping the DAO community & leverage tech integrations for DAO development.**

🟧 **ABOUT ROUTER PROTOCOL**

Router Protocol aims to bridge blockchain silos through modular interoperability. With a dynamic validator-orchestrator module backed by a highly secure architecture, Router is able to provide an infrastructure for cost-efficient token swaps across blockchain networks.

🟧 **PROSPECTIVE AREAS OF CONTRIBUTION**

- development of interoperability layer
- implementation of Cross-chain bridges
- product & tech integrations
- vetting & voting of tech proposals
- technical leadership, guidance & advice
- feedback & support
- & more...

🔅 **Read more here**: [https://bit.ly/Scalar-Contributor-Router](https://bit.ly/Scalar-Contributor-Router)

#scalingdefi

⚡️ ROUTER PROTOCOL JOINS SCALAR DAO AS CONTRIBUTOR ⚡️ Scalar DAO is absolutely thrilled to welcome @routerprotocol as our valuable Contributor in building a robust interoperability layer on the DAO, bootstrapping the DAO community & leverage tech integrations for DAO development. 🟧 ABOU

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