- USDC – Ranked first as the most reliable stablecoin.
Issued by Circle, with partners including Coinbase, BlackRock, MasterCard, Visa, and other major players.
When it comes to holding a stablecoin long-term and using it as dollars, USDC is the best option for me in terms of security.
In DeFi, most tools are also tied to USDC, making it my top choice for stablecoin usage in DeFi as well.
- USDT – Ranked second.
The largest stablecoin by market capitalization and the first stablecoin backed by dollars, launched in 2014.
USDT has less trust in the crypto community compared to USDC, mainly due to its issuer not having as extensive a network of partners as USDC.
While there have been issues with confirming collateral, these are mostly rumors and tabloid news.
USDT is the oldest stablecoin, having deviated from the dollar’s value only a few times since its launch in 2014, mostly due to panic rather than lack of real collateral.
I use USDT in DeFi instruments if it offers higher returns or lower borrowing rates on platforms like AAVE.
In all other cases, I use USDC.
- DAI – Ranked third.
A stablecoin issued by MakerDAO collateralized by cryptocurrency assets and short-term US bonds.
Bonds make up almost 54% of the collateral, with the rest being BTC, ETH, and USDC.
DAI is overcollateralized. At the time of writing, its collateralization ratio is 267%.
This means that 1 DAI is backed by assets worth 2.67 US dollars.
I personally use DAI only where it offers good returns, such as liquidity on the Gains Trade exchange.
A significant difference between DAI and USDC/USDT is the inability to freeze it at owner addresses, as this feature is simply not present in the smart contract.
USDC and USDT can be frozen at your address, but I’m not concerned about this at all, as the chance is close to zero.
USDC and USDT are frozen at hacker addresses, individuals under sanctions with large capital, fraudsters, and criminals. This does not affect ordinary people at all. Therefore, I’m not worried about it.
If you’re worried, hold your money in DAI.
- FRAX – Ranked fourth.
FRAX is 96% backed by USDC, with the remaining 4% being backed by the FXS token.
Currently, FRAX is gradually transitioning to 100% backing by USDC to completely remove FXS influence.
However, FRAX is not simply wrapped USDC. The Frax Finance ecosystem is much more complex than it seems at first glance.
I use FRAX in cases where it offers good returns in DeFi instruments.
While there aren’t many of them yet, the FraxChain network will soon be launched, where FRAX will have a wide range of applications.
These are the four stablecoins that I use regularly in my work. There’s also crvUSD, which I use exclusively in liquidity pools and lending markets for earning.
Additionally, there’s EUROC, issued by the same issuer as USDC.
I don’t use the other stablecoins, with rare exceptions. Ultimately, the choice of stablecoin is yours. I’m just sharing my experience and observations.