How to convert my btc to usdt on trust wallet
A Beginner’s Guide to Stablecoins
Published on 30 Jul 2021
Stablecoins have experienced explosive growth in the last 18 months, totaling over $100 billion in market value.
In this guide, you will learn what stablecoins are, how they work, and what role they play in the crypto ecosystem. Additionally, you will discover a list of stablecoins that crypto users love.
What Are Stablecoins?
As the name suggests, stablecoins are cryptocurrencies with a stable price. Stablecoins typically achieve price stability by being backed by reserve assets, typically a fiat currency or a commodity.
The majority of leading stablecoins are backed by US dollar reserves to enable a 1:1 price parity with the US dollar.
Stablecoins have gained in popularity because they combine the trust and stability of fiat currencies, such as the US dollar, with the openness, programmability, and accessibility of cryptocurrency.
Types of Stablecoins
Not all stablecoins are created equal. While the majority of leading stablecoins are backed by US dollars held in regulated bank accounts, there are also stablecoins with other stabilization mechanisms.
Fiat-backed: these stablecoins are backed by fiat currencies, like the US dollars and other government-issued currencies. They hold their value almost exactly 1:1 to the reserve fiat currency. Examples of these are USDC, USDT, and BUSD.
Crypto-backed: these stablecoins are backed by other cryptocurrencies. They typically function like a fiat-backed stablecoin, except the reserve to guarantee the stability of these tokens is in cryptocurrency. Examples of a crypto collateral-backed stablecoin would be MakerDAO’s DAI.
Commodity-backed: these stablecoins use physical assets like gold and other precious metals as a reserve as opposed to fiat or crypto. The most popular commodity used is gold. Examples of commodity-backed stablecoins are Tether Gold (XAUT) and Paxos Gold (PAXG).
Algorithmic stablecoins: these stablecoins use an algorithm to keep the stability of the token. Simply, the code controls the demand and supply of the token to stabilize the token price.
The Role of Stablecoins in the Crypto Markets
The price stability that stablecoins bring to the table provides these digital currencies with a broad array of use cases. The most prominent stablecoin use cases include:
Traders can easily move in and out of risky crypto-assets on exchanges.
Stablecoins are now the most used for price quotations on crypto exchanges and in the OTC markets. Trading volumes on USDT/BTC are now bigger than USD/BTC, for example.
Investors use stablecoins as an on-ramp to DeFi.
Web 3.0 users use stablecoins as a transactional currency in DApps and on NFT marketplaces.
Individuals and businesses in unstable economies use stablecoins as a store of value.
Businesses and individuals use stablecoins for cross-border payments.
Crypto borrowers typically use stablecoins as collateral on DeFi lending platforms.
List of Best Stablecoins
The four leading stablecoins by market capitalization are Tether USD (USDT), USD Coin (USDC), Binance USD (BUSD), and Dai (DAI).
Let’s look at each of these in detail to help you understand the differences and similarities.
Tether USD (USDT) was the world’s first stable digital currency pegged to the value of the US dollar price when it launched in 2014. USDT tokens are backed by US dollars reserved held in bank accounts by Tether Limited.
It’s currently the largest stablecoin and accounts for a significant portion of the trading volume in cryptocurrency markets. Operating as a multi-chain stablecoins, USDT has a market capitalization of $60+ billion.
How Does USDT Work?
USDT is a digital currency that is able to retain its value because it’s backed by US dollar reserves managed by Tether. USDT is primarily used to trade against other cryptocurrencies, like BTC and ETH, and as a popular asset in the decentralized trading and lending markets.
Tether USD is available on popular cryptocurrency exchanges, including Binance, BitFinex, Coinbase, and Kraken. You can also get your hands on USDT by converting another cryptocurrency, like ETH, into USDT directly in your Trust Wallet.
USD Coin is the fastest growing fully reserve stablecoin backed 1:1 with US dollars reserve. The stablecoin was launched in September 2018 by a partnership between Circle and Coinbase to provide a US dollar-backed stablecoin with a high level of trust and transparency, thanks to its monthly reserve attestations by a leading auditing firm.
How Does USD Coin (USDC) Work?
USD Coin (USDC) functions as a blockchain-based token (such as an ERC-20 token on Ethereum) that can be used on a number of blockchains in addition to Ethereum, including Algorand, Stellar, Solana, and Tron.
USDC can be used for cross-border payments, trading against other cryptocurrencies, and stored to earn a yield or borrow in the DeFi markets.
Binance USD (BUSD) is a digitized dollar launched in 2019 by Binance and Paxos. BUSD is backed 1:1 with US dollars. Paxos and BUSD are regulated by the New York State Department of Financial Services to protect users.
BUSD can be held as a hedge against crypto volatility and fiat currency devaluations. It can also be traded and used in the DeFi markets for borrowing or lending.
How Does BUSD Work?
BUSD is 100% backed by US dollars held in FDIC-insured banks, and monthly audits are done to verify the reserves. The token is available is issued as Ethereum (ERC-20), Binance Chain (BEP-2), and Binance Smart Chain (BEP-20) tokens.
Dai (DAI) is the market-leading popular crypto-backed stablecoin that aims to keep a 1:1 price-peg with the US dollar. Dai is an ERC-20 token on the Ethereum blockchain, issued and managed by MakerDAO, a decentralized autonomous organization.
Unlike the other stablecoins mentioned in this article, Dai doesn’t have US dollars held in bank accounts. Instead, it uses a smart contract to manage the supply of the token. For each minted DAI token, cryptocurrencies are deposited into its smart contract vaults.
One of the main features of DAI is that it isn’t operated by a group of co-founders. Rather, the software that manages the money supply is governed by the MakerDAO and Maker Protocol, which is made up of different individuals that run in a decentralized manner via the use of smart contracts. However, the MakerDAO was started by a Danish entrepreneur Rune Christensen in 2015.
How Does DAI Work?
DAI is a digital dollar on the Ethereum blockchain, controlled by code. The holders of Maker (MKR) vote on key decisions about the development of the stablecoin and the protocol that issues it, Maker Protocol.
To mint DAI, you have to lock up cryptocurrency in a smart contract vault. The code is able to keep a soft-peg of 1:1 ratio to the dollar by burning DAI when cryptocurrency is withdrawn from the vault and issuing new tokens when cryptocurrencies are added to its vault. Alternatively, you can swap any ERC20 token, like ETH, into DAI in your Trust Wallet app.
The key advantage of DAI is that it is not managed by a private company that manages reserves. The issuance and burning of tokens are publicly recorded on the Ethereum blockchain, making it more transparent.
Securely Store and Deploy Stablecoins in Trust Wallet
Trust Wallet is the leading multi-asset mobile wallet that allows you to store 160,000+ digital assets, including all leading stablecoins across all major blockchains they support.
What’s more, using the Trust Wallet DApp Browser, you can seamlessly deploy stablecoins in DeFi protocols or decentralized applications (DApps) with the click of a button on your smartphone.
To start using stablecoins, download Trust Wallet today.
Fees You Can Trust. Trust Wallet & Binance Smart Chain’s Fee Structure
Published on 17 Nov 2020
Fees play an essential role in the crypto ecosystem as they make up a large proportion of the industry’s company revenues. Crypto exchanges, wallet providers, payment services typically all charge fees to generate revenues.
In this guide, you will learn about the comparatively low fees charged by Trust Wallet and Binance Smart Chain (BSC).
Why Fees Matter
While it may sound obvious, it doesn’t hurt to reiterate why fees matter for crypto users.
It’s simple: the more fees you pay, the lower your returns will be.
If you actively trade crypto (without trading discounts), your trading revenues will be affected by trading fees and exchange withdrawal fees.
If you regularly spend digital currency on everyday purchases, wallet fees and crypto payment provider fees will increase your transaction costs.
If you cash out crypto for fiat currency, you will pay exchange transaction fees that will affect the final amount of cash you will receive.
Fees keep the crypto industry going and are, therefore, a necessity. But high fees are harmful to users and hinder mass adoption.
Fortunately, there are service providers and crypto networks focused on delivering the best possible user experience at the lowest possible fees. Two examples of that would be Trust Wallet and the recently launched Binance Smart Chain (BSC).
What Fees Does Trust Wallet Charge?
Trust Wallet is a market-leading multi-cryptocurrency wallet that enables 5+ million users to securely store dozens of digital assets, interact with Web 3.0 applications via a DApp Browser, and make in-app crypto purchases.
Despite offering such an extensive array of services, Trust Wallet does not charge any wallet fees.
No Wallet Fees
Crypto wallets typically charge a small fee every time you make a transaction. If you are using Trust Wallet, you will not be charged anything for using the wallet.
No Swapping or DApp Fees
Additionally, Trust Wallet does not charge any additional fees for swapping one crypto for another on the in-app DEX or when a user utilizes the DApp Browser to interact with decentralized applications.
Blockchain Network Fees
However, that does not mean using crypto within Trust Wallet is entirely free because cryptocurrencies incur blockchain transaction fees that are paid to the miners (or validators).
Fees vary greatly from blockchain to blockchain.
For example, during times of heightened usage of the Bitcoin blockchain — as we are currently experiencing as a result of the ongoing bull market — transaction fees can be as high as $5 to $10, especially for small transactions.
The same goes for the Ethereum blockchain, which experienced an unprecedented level of usage during the yield farming boom this summer. At some point, Ethereum “gas” fees exceed $10 per transaction, making the network effectively unusable for users in many parts of the world.
So if you are using Trust Wallet to make a payment with bitcoin, interact with an Ethereum DApp, or send a CryptoKitty to a friend, you will incur (unavoidable) network fees.
The good news is that Trust Wallet allows you to set your own network fees for Bitcoin and Ethereum. So for urgent transactions, you can set a higher network fee and for less urgent transactions a lower fee.
Crypto Purchase Fees
Trust Wallet also allows users to buy digital currency using the wallet’s in-app purchase option that connects directly to third-party fiat-to-crypto onramps, MoonPay and Simplex.
For example, to buy bitcoin using Trust Wallet, you access your bitcoin wallet and click the ‘Buy’ button on the top right of the app.
Next, you type in the amount of bitcoin you want to buy (in fiat currency). At this point, the app will choose a suitable third-party provider for the transaction.
When you click ‘Next,’ a web browser will open where you will find the third-party’s crypto purchase service. Follow the instructions and finalize your purchase using your credit or debit card.
Regardless of whether you’re using MoonPay or Simplex to buy crypto, Trust Wallet will not charge any additional fees on top of what the third-party provider charges. While most wallets typically add a fee for credit card bitcoin purchases, Trust Wallet does not profit off its users.
Binance Smart Chain Is Winning on Speed & Fees
Binance Smart Chain (BSC) is a recently launched parallel blockchain to Binance Chain that allows for the seamless creation and interaction with decentralized applications.
As an EVM-compatible blockchain, its primary goal is to provide a much-needed alternative to the increasingly slow and expensive Ethereum blockchain for the burgeoning DeFi market.
Transactions on Binance Smart Chain are processed within seconds (thanks to 5-second block times), while transaction fees are typically in the $0.01 to $0.03 range, making it one of the most competitive smart contract networks in the market.
The reason why BSC’s transaction fees are so much lower than on the Bitcoin and Ethereum networks is because of the consensus mechanism it deploys.
Bitcoin (and Ethereum still) utilize a Proof-of-Work (PoW) consensus protocol that involves miners deploying computing power to solve mathematical equations to secure the network and process transactions.
To maximize transaction fee returns, miners are incentivized to validate transactions with high fees first which creates a scenario where fees start to increase as blockchain usage increases. In some cases, transactions with fees that are too low end up stuck in the mempool for days or are canceled automatically after a period of time.
Conversely, Binance Smart Chain deploys a Proof of Staked Authority (PoSA) consensus mechanism, which involves a system of 21 validators that validate blocks and process transactions. As a result, BSC can achieve much higher transaction speeds at a much lower cost per transaction.
In light of BSC’s low transaction fees, it is not surprising that several DeFi protocols have already launched on BSC while others are considered a move over to the new chain from Ethereum.
The BSC “Fee Holiday”
In addition to Binance Smart Chain’s ultra-low fees, Binance has decided to provide a “fee holiday” for promising projects in the BSC Accelerator Fund.
As part of its newly-launched BUIDL Reward Program for developers building decentralized applications on Binance Smart Chain, the leading crypto company has committed $5 million worth of BNB to the rewards program.
The rewards will be distributed in the form of transaction fee rebates for eligible smart contracts deployed on the BSC network.
Trust Wallet stands out among its peers because of its zero-fee model that empowers users to reap the full rewards of using cryptocurrency and blockchain applications.
What’s more, Binance is taking a very active approach to ensuring that fees will not hamper the development of a burgeoning DApp ecosystem on its newly launched Binance Smart Chain.