One of the first algorithmic stablecoin systems was Frax Protocol. Frax is the largest holder of Convex’s CVX governance token, accounting for 16.7% of the total supply. Frax holds a big amount of external collateral from FRAX minting…
Cryptocurrencies are known for their high volatility, with price swings of tens of thousands of dollars. Stablecoins, on the other hand, are a type of cryptocurrency that promises to be a safe haven for people who want to avoid the constant volatility of the stock market.
However, algorithmic stablecoins like terraUSD (UST), Multi-Collateral Dai (DAI), frax (FRAX), and neutrino usd (USDN) have appeared in the last year, each with its unique collateralization (USDN). Because they’re maintained by an on-chain algorithm that allows for supply and demand variations between the stablecoin and another cryptocurrency that keeps it afloat, they’re known as algorithmic.
The majority of algorithmic stablecoin tokens are undercollateralized, which means they lack independent assets in reserve to back up the value of their stablecoins. The TerraUSD tokens, on the other hand, were unexpectedly “de-pegged” from the dollar, wiping out 95% of investors’ funds overnight. Investors lost faith in cryptocurrencies after Terra’s demise, and it also taught them that all digital assets are intrinsically volatile. Let’s take a look at a few more popular stablecoin governance tokens.
MKR is the governance token of the MakerDAO and Maker Protocol. DAI, an Ethereum-based stablecoin, is governed by the Maker Protocol and MakerDAO. The price of DAI is soft-pegged to the US dollar and backed by a mix of other cryptocurrencies that are stored in smart contract vaults when a new DAI is released.
DAI was the market’s first and largest decentralized stablecoin prior to UST’s meteoric surge. While everyone is predicting the demise of algorithmic stablecoins, DAI has managed to thrive. It held up throughout a period of tremendous volatility, and for some investors, it even served as a safety net. MKR tokens serve as a voting share for the DAI management group. Let us look at the MKR price
MKR Price Prediction
MKR retraced to the important support level of $680 after failing to break through the $1324 resistance level. It is experiencing low volatility as the price action is hovering around the $700 mark, with neither side able to break out. It could attempt the $1324 level again if it manages to break through the $939 resistance level.
Frax Share (FXS)
Frax Protocol was one of the first algorithmic stablecoin systems. Convex’s CVX governance token is held by Frax, who owns 16.7% of the entire supply. Frax minting has a significant quantity of external collateral. The protocol’s AMO (Algorithmic Market Operations) controllers generate huge profit. Finally, it is distributed to FXS holders through buybacks and token burning. Let’s have a look at the FXS.
FXS Price Prediction
After testing the $4.47 support level and breaking over the $5.79 resistance level a few days ago, FXS gained traction. However, it was unable to maintain its position above the $5.79 resistance level and plummeted to the $4.47 support level. FXS can aim for the $6.7 and $8.58 significant obstacles if the bulls break past the $$5.79 resistance level again.
The Waves (WAVES) team has released a DeFi Revival strategy with aim of making its customers whole and restoring full protocol functionality. Fresh steps will be part of the overall strategy to ‘attract new liquidity to USDN and strengthen the architecture of the algorithmic stablecoin to withstand future black swan events.
Sasha Ivariv, the founder of Waves, has also pledged to personally absorb the $400 million in debt. Upbit, South Korea’s largest crypto exchange, has cautioned that the depreciation of the USDN and USDD tokens could pose a risk to WAVES and TRON (TRX). The Neutrino USD (USDN) is currently trading at $0.96. It has a negative impact on the WAVES token prices. Let us look at the WAVES
WAVES Price Prediction
After hitting the $64 price level, WAVES is down 94%. It has also recently lost the critical support level of $8.22. This price level will act as a resistance in the following days or weeks. The $4.1 price level has provided some support for the time being. WAVES must also break through $8.22 in order for a short-term bullish bias to succeed in overcoming downtrend momentum. The next resistance level is $11.03, if it passes through.
And for our best, freshest research on NFT buys, Layer 1 chains, DeFi, or games, come check out Altcoin Buzz Access. Plans start at only $99 per month
For more information on cryptocurrency, visit the Altcoin Buzz YouTube channel.
Images courtesy of TradingView.
The information discussed by Altcoin Buzz is not financial advice. This is for educational and informational purposes only. Any information or strategies are thoughts and opinions relevant to accepted levels of risk tolerance of the writer/reviewers and their risk tolerance may be different than yours. We are not responsible for any losses that you may incur as a result of any investments directly or indirectly related to the information provided.
Do your own due diligence and rating before making any investments and consult your financial advisor. The researched information presented we believe to be correct and accurate however there is no guarantee or warranty as to the accuracy, timeliness, completeness. Bitcoin and other cryptocurrencies are high-risk investments so please do your due diligence. Copyright Altcoin Buzz Pte Ltd. All rights reserved.