USDT vs. USDC, which is better?

When it comes to stability coins, the first reaction of many is the USDT. The USDT is also referred to as the TEDA coin. It is a token based on the fixed US dollar (USD) currency launched by Tether, a virtual currency that connects cryptocurrencies to US fiat currency. Dollar .. There is also the USDC, a stable currency that is pegged to the US dollar, both of which maintain a stable market and can be seen on almost all major cryptocurrency exchanges, wallets, and apps.

1. What is USDT?

USDT was a stable cryptocurrency first launched by Hong Kong-based Tether Limited in 2014 and aims to be the bridge between cryptocurrency and fiat money. It has high liquidity but no volatility. As Tether guides the USDT, the USDT strictly follows the 1: 1 Reserve Guarantee. This means that for every USDT token donated, there is a $ 1 cash guarantee in your bank account. USDT is an encrypted digital currency that can be sent, stored, and used through wallets and trading platforms. However, it is characterized by a 1: 1 ratio between the USDT and the US dollar.

Although the USDT is still the largest currency in the world, its economy has fallen sharply. In a stable financial market, the USDT exchange rate fell by around 50%, according to data from Messari, and the USDC grew rapidly due to its transparency and stability. It has become an integral part of the Ethereum chain.

2. What is USDC?

USDC is a USDC financial institution provided by Circle, invested by Bitmain, Goldman Sachs, IDG, CICC, Everbright and Baidu.

Circle, the publisher behind USDC, now holds payment licenses in all states except Hawaii, the UK, and the European Union, while New York has BitLicense. US dollars, pounds sterling, and euros are legal for and through crypto assets.

Unlike USDT, which has only one exporter, USDT can be supplied and used by other organizations in the core network. However, consultants are required to comply with licensing, compliance, collection, operations and procedures. In order for USDC to maintain individual support, manufacturers must return all of their tokens to fiat reserves and provide proof of their holdings on a monthly basis. According to the most recent savings cycle forecast for May 2021, the total value of USDC fixed income coins in circulation was $ 22.18 billion, and the total investment was $ 22.2 billion, making it makes the second largest stable coin in the world after the USDT.

3. Comparison between USDT and USDC

(1) Comparison of transparencies

Thether Limited wrote in its free USDT form:

"Tethers are digital resources connected to legitimate resources. All Tethers are first placed as tokens on the Bitcoin blockchain of the Omni Layer protocol. All Tethers provided and presented are linked one by one to the US dollar at - 1 base. All USD is kept in Hong Kong Tether Co., Ltd. (for example, 1 Tether currency equals 1 US dollar).

Thether Limited guarantees that the price of Tether will always be linked to the value of the fiat and that the fiat storage link will always be greater than or equal to the value in circulation. However, I am afraid that only The Limited knows the real situation. In April 2019, attorneys for Tether publicly acknowledged that no dollar equivalent of all Tethers was given to banks supporting digital assets. A US government agency also pointed out that holding USDT for a while is only 70%. In short, the USDT has not released its research data, and that is why the USDT is now under criticism.

Circle, the USDC advertiser, promises to be more transparent than USDT in allowing expert financial firm Grant Thornton to publicize its financial situation. It then sends the USDC shipment to the user to ensure that the storage of the indexed currency is equal to the currency in circulation. This is another important reason why USDC is currently so popular.

(2) Market comparison

USDT and USDC are popular options for joint ventures using DeFi (decentralized finance) protocol. With 4 years ahead of the USDT, the USDT has long been the most widely used stable currency and is today the most competitive in the financial markets.

However, USDT has narrowed the spread with USDT to some extent in terms of focus and safety, and is now available on various blockchains such as Tether, even beyond some USDT. The most representative is Coinbase. Among the first digital currencies listed, USDC was the only stable currency supported by Coinbase.

Stables offer the ability to withstand volatility that other currencies can easily access, and the market also gives consumers the right to choose from a wide range of stable currencies. USDT continues to play a key role in the stable market, with total assets exceeding $ 64 billion, but clearer analysis determines USDC's share in total stable growth. .