USDT vs. USDC: If you’re familiar with cryptocurrency, you would know its exchange rates are highly volatile. Crypto rates can be so high today and very low tomorrow. This is because crypto rates are influenced by not one or two but lots of facts. Some of these factors are demand and supply of the crypto, mining, cost of production, competition, cost of publicity, regulatory fees, and competition, amongst others. In order to combat the price swings of cryptocurrencies, stablecoins were created.
USDT vs. USDC
Stablecoins is a reliable way for almost anyone to remain in the crypto ecosystem. If you have a low-risk threshold, stablecoins are for you because their prices are not volatile. The value of most stable coins like USDC and USDT is pegged to real-world assets, usually local or fiat currencies. This way, stablecoins offer everyone, not just new crypto traders, a good and profitable break from the constant fluctuations of normal crypto exchange rates.
Stablecoins are like every other cryptocurrency. Just because they are tied to the value of the US dollar, it doesn’t mean they are withdrawn at banks or ATMs. However, they can be sold on exchange platforms for cash and withdrawn from the bank.
The two most popular stablecoins with the highest market cap are USDT and USDC. Their values are tied to the US dollar but have different values and uses. In this article, you will learn the significant differences between them and the best choice for investment.
What is USDT?
USDT is one of the first successfully launched stablecoins. It was launched by Tether Limited, a Hong Kong-based crypto company. According to the creators, USDT was created to bridge the gap between crypto and the Dollar, and if we are being honest, it has been doing just that. USDT holds several similarities with traditional cryptocurrencies like Bitcoin and Ethereum, like their liquidity and other technical advantages. However, USDT is different because it doesn’t share in their volatility.
In a way, USDT is crypto dollars and can be used to purchase anything or sent to others with speed, transparency, low transaction loss fees, and security. When USDT was first released, it gained a market advantage by being listed against other cryptocurrencies. Today, USDT has a market capitalization of over $81 billion, and it is being circulated on all the popular blockchains to boost its legitimacy. Hence, with your USDT, you can purchase other cryptocurrency or exchange it for naira on an exchange platform like Astro Africa.
What is USDC?
USDC was created four years after USDT was created in 2018. USDC was created by Coinbase and Circle; the coin is, however, controlled by the centre consortium. The centre consortium controls the technical and financial standards of USDC to ensure that it is in the correct ratio of 1-to-1 with the US dollar. This means that for every USDC mined, one US dollar is reserved.
The current market capitalization of USDC is over $30 billion, with an equal dollar amount in reserve. Like USDT, USDC can be used for everyday purchases of another cryptocurrency or sold on exchange platforms like Astro Africa.
USDT vs. USDC: What are the differences?
USDT is the most popular stablecoin because it was created four years ahead of USDC. However, crypto analysts have observed that USDC is a safe stablecoin because they are more transparent and willing to comply with government audits.
USDT has a higher trading volume and is more used as trading pairs in DeFi protocols than USDC.
The safety of USDT has often been questioned because Tether has yet to provide complete updates on how the stablecoin is being backed up. USDC, on the other hand, has been very forthcoming, transparent and regularly releases audited reports on the state of their reserves.
Interest can be earned on USDT and USDC when traders lend their stablecoins for a fixed duration. This is another earn without trading.
Traders can provide liquidity on USDC and USDT with automated maker decentralized exchange.
Which should I invest in?
At the end of the day, the onus lies on you. They are both worth the same amount in Nigerian naira. Both can lend, stake, and provide liquidity for trading pairs, even though the returns may vary.
However, whichever one you invest in, ensure that when you’re ready to convert them to cash, you do so on Astro Africa. Astro Africa is the best crypto exchange in Nigeria. It prioritizes the needs of its users by selling cryptocurrency at the best rates, and the platform is entirely safe. To get started, visit our website or download the mobile app from Google Playstore or App Store.
