What is Pegged Cryptocurrency?
Pegged cryptocurrencies are essentially tokens that are tied down to the value of another commodity. To put it simply, the token is always supposed to be worth the same as the commodity that it’s tied to. In order to be able to be considered a pegged cryptocurrency. Tether is one of the first examples or at least the most popular examples that showed up on the market. The value of the USDT token is always going to be worth the same as a regular US dollar in fiat currency.
There are a couple of benefits that pegged crypto currencies want to provide through pegged asset exchange platforms. For one, it’s a great way to legitimize and stabilize a decentralized token. That otherwise would have to find its value on the market. The dollar is not the reserve asset that a stablecoin or pegged cryptocurrency can be tied to. There are some tokens that are tied to the value of gold for example. Some of these tokens have become very popular in exchange sites such as Saddle Exchange.
More Benefits Of Pegged Crypto Currency
Some investors see the main benefit as being the fact that you can take advantage of cryptocurrency payments if you will. In the sense that you can transfer assets through the blockchain. In doing this in a pegged cryptocurrency you’re getting the benefit of the quick transfer of assets. Without necessarily having to buy a coin that is highly volatile. Very recently an example of those fears played with NFL star Odell Beckham. He requested that his salary be paid in cryptos, and the value of those went down over the course of the season. He was heavily shamed for that.
At the end of the day, that comes with the territory with cryptos. The value is volatile. Anyone who wants to deny that is delusional. With pegged currency though you’re tied down to what is usually a less volatile asset. In many of these exchanges, you also get quick proof of the transaction. While this is something that has become easier to obtain over the years, it was a big issue in the early days of cryptocurrencies. Where the transaction was off the grid and not traceable. As a user though, it was a bit hard to keep track of what you did with your own assets.
Is It Safe To Use These Exchanges?
The reality is that it depends on what exchange you’re going to be using. Many people end up sticking with the well-known names, even if what they offer isn’t great. Just because you don’t want to fall victim to scams out there. This is an issue that has been cleaned up a bit over the years. It’s become easier to spot something that is offering a fake service. As with any type of online activity that involves the transaction of money or assets you want to be very careful. Give some of the top options a look and see which one suits your needs best! We are referring to both the pegged asset exchange and pegged tokens that you’re going to use.
