HomeHow To Trade Stablecoins On The Dex

How To Trade Stablecoins On The Dex

A stablecoin DEX is essentially a financial asset that DeFI platforms use to be able to process certain types of transactions through their own blockchain space. There are a couple of questions that people tend to have about stablecoins, and we’re going to try and answer plenty of them here. Including the process of how to trade a stablecoin in a decentralized exchange.

You’re Going To Be Granted Access To The Stablecoin Once You Enter A Platform

Access to stablecoins is actually rather simple. There are two ways that you can go about this, you can choose to sign up for a platform because it has access to a particular stablecoin, or you can choose a DeFi platform based on other factors and just trade the stablecoins that it has available. In any case, what you’ll most likely be asked to do to process any transaction is to convert your USD or your fiat currency in general to a stablecoin. Most platforms are going to guide you through this process in a carefree manner.

Why Are Stablecoins Always Worth The Same?

This is a major misconception, and for people who are familiar with the concept of stablecoins it can seem like an awkward question. Since it’s one that we see plastered all over the internet we want to tackle it. The thing with certain stablecoins is that they are going to be pegged to the value of fiat currencies. So that means that if you buy x number of dollar’s worth of a token like USDT you should be getting your dollars’ worth of investment in the token. That doesn’t mean that the value is always going to be the same.

Another thing that we want to address is that not all stablecoins are going to be tied down to the value of fiat currencies. Other popular stablecoins are tied down to the value of different commodities. In this situation, you are very likely to see that the value of those stablecoins is going to vary throughout the year. The idea that stablecoins are always worth the same is just flat out wrong. There’s really no other way to be able to put this.

Can You Make Money With Stablecoins?

There are essentially two main ways to be able to make money with stablecoins. For example, with stablecoins that are tied down to the value of a commodity, you can buy and hold the coin to sell it at a later date when the value has increased. Much like you would with assets in a regular trading platform. Of course, you could do that with a stablecoin tied to a currency, but that example isn’t necessarily as clear to many people.

The other way that investors could make money, particularly in a DeFI platform is by investing in the liquidity pools that the platform offers. These pools are essentially the way that a platform has to finance itself and use financial instruments typical of the traditional banking system. You can buy stakes in pools and earn interest rates on the tokens that the platform borrows to process transactions within itself. 

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