What are the differences between USDC, USDT, and DAI?

[USDC](, [USDT](, and [DAI]( all stablecoins pegged to USD. 1 unit of each one of these cryptocurrencies = 1 unit of USD. So, if these coins value the same amount of USD, what differences are there between them?

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  1. USDT – company Tether, backed by unaudited USD reserves, just had a settlement with regulators in the US

    USDC – company Coinbase,backed by USD reserves

    DAI – company MakerDAO, backed by a mix of cryptocurrencies according to a smart contract mechanism, has a little bit more fluctuation, but is more transparent

  2. DAI is a decentralized Stablecoin from MakerDAO, and has been the essential building block which has allowed DeFi to exist and prosper. It solves the largest problem in crypto-based financial services — volatility.

    While there are other Stablecoins such as Tether, DAI was the first decentralized stablecoin on a programmatic blockchain platform — Ethereum. DAI is native to the Ethereum blockchain and is backed 150% by Ether and pegged to the US Dollar.

    In my opinion, DAI is a fundamental building block of the DeFi economy running on Ethereum.

    Tether is the oldest stablecoin, first issued in 2014, and still the most liquid in the world. At one point, (data source Coinmetrics) Tether averaged ~hundreds of millions of transactions per day. Tether now transacts on Ethereum as an ERC-20 since 2018 and branched away from the Bitcoin Omni network.

    Tether is not transparent. It’s a dollar backed stablecoin, but you cant see where those dollars are held. There are constant issues surrounding banking and it seems that ordinary holders of Tether have always had trouble withdrawing into fiat currencies.

    USDC is a US Dollar-backed stablecoin that anyone with a US bank account can withdraw into US Dollars. USDC was created by Coinbase (the exchange) and the reserves are audited each month. USDC holders rest assured there is a qualified custodian backing their funds.

    USDC is 100% centralized. Coinbase is a US entity and anyone exchanging funds can can be subject to having their USDC accounts frozen.

  3. DAI: decentralized, algorithmic (value pegged based on market forces)

    USDC: centralized, fiat-based (value pegged based on 100% USD reserves…as it should be)

    USDT: centralized, fiat-based (value pegged based on 75% USD reserves with the other 25% promised-but-unproven to be based on other assets)

  4. The main difference is how the are attached to the US dollar.

    USDC is a CoinBase coin that is backed by a physical dollar in their bank.

    DAI is an ethereum coin that is backed by collateral on the Maker platform. (It’s price will slightly wobble around $1 as it tries to maintain its value through buys and sells)

  5. Tether USD (USDT) is the market-leading dollar-backed stablecoin. By Tether but unaudited and many negative events in the past

    USD Coin (USDC) is the fastest-growing fully reserve stablecoin backed 1:1 by US dollar reserves held in regulated financial institutions in the United States. By Coinbase.

    Binance USD (BUSD) is Binance’s very own dollar-backed stablecoin that was launched to provide a Binance-native alternative to other leading stablecoins.

    DAI – By MakerDAO, part of the Ethereum Network, has a little bit more fluctuation.

  6. I heard the usdc issuers can freeze your usdc funds, I don’t know if it’s part of the erc20 contract itself of if it happens when you go to the fiat off ramp (like Coinbase)

  7. The coins are only worth $1 because a company is saying they have an equal amount of fiat currency as stable coin. Should that not be the case, the coin will no longer have a stable value. So for quick transaction, so BTC to USDC to ADA, there is little risk. Keeping money in a stable coin long term brings greater risk, since you have longer exposure to the company’s financial situation. With many of these companies having less that full transparency, there is moderate risk that in the long run, or a bear market, they may not be able to fulfill their end of the obligation.

    DAI is a bit different, as it is back by smart contracts and crypto.

  8. USDC is a product of Coinbase. USDT is just printed for out of thin air. Both tokens are “backed” by the same amount of dollars Coinbase and Tether have.

    DAIs price is kept around $1 by market, since you need to deposit ETH and other tokens to get DAI and vice versa. So arbitrageurs, trying to profit from ETH and other tokens’ price relative to DAI, keep DAIs price at ~$1.

  9. DAI = decentralized (my coin of choice when I have an option)
    USDC – audited regularly to ensures there is $1 held in custody accounts for every 1 USDC minted
    USDT – who knows given their shady bs



What do you think?

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