Within the stable coin community, there possibilities are expanding quickly. Most of the stable coins are striving to be backed by a fiat equivalent. This provides their values to be more or less as stable as the fiat that they are tied to. We are going to take a look at Tether (USDT), DigixGold (DGX), and OneGram Coin (OGC). All three of these are tied to some real-world source of value. The latter is looking at this principle idea in a somewhat different but important way. Tether is backed by the United States Dollar, DigixGold (DGX) is instead pegged to the price of one gram of gold, while OneGram Coin is backed by gold but that gold grows through transaction fees. Let’s take a look at the performance of these digital assets and their recent merits.
Tether is commonly seen as a place for traders to get out of the market during times of volatility. By checking the last 30 days of USDT trading price, we can see variations in price though subtle in comparison to what we see in the crypto market at large. The price of USDT seemed to fluctuate from a 30 day low of $0.98 to a high of $1.04. This fluctuation is not drastic in any way when compared to the high volatility of the markets at large. USDT seems like a good place to hide from extreme market fluctuations, but this stability hinges on the correctness of the liquidity that backs it. There has been some concern over the validity of USDT. In late 2018, there were concerns that Tether may be in trouble after letting go of their auditing company. Tether had seen greater turmoil during a market disruption that caused their “stable” coin drop to $0.89. This is generally not unusual for crypto, but even more unusual for a coin that is supposed to be linked directly to the value of $1.00 per coin.
DigixGold is a coin that is pegged directly to only one gram of pure gold. This provides a floor to support the price-point, however it provides no real upside potential in long term profits, barring any drastic change in the valuation of gold. The amount of gold backing each coin will always be no more than 1 gram. DigixGold is built on the Ethereum token protocol ERC-20 “with extensions” meaning they are able to be transacted among any wallets that support Ethereum, which is nice, and other than a few outliers this coin seems to provide some reasonable stability.
As you can see from the charts above, for the most part, DGX seems to stay relatively close to the actual price of gold – aside from the one instance around December 20th, 2018 when it jumped to roughly $74. Other than that, the price of DGX stayed approximately stable and the pegged gold weight stayed the same.
OneGram Coin (OGC)
OneGram Coin is a relatively new player to the game as well, having run a successful ICO that ended 6/20/2017. Once this ICO ran, each coin that would eventually be distributed would be backed by at a minimum, one gram of actual gold. Their live blockchain launched in June 2018 and ever since then they’ve been on a roll. They have been listed on exchanges like Trade Satoshi, BITKER, Huulk, and more to be announced in the coming months. What is important is that this is a cryptocurrency that projects itself as a stability token in that it represents at a minimum, one gram of pure gold per coin. This is an interesting idea because, although there are other coins out there pegging themselves to fiat, this one links itself to a growing real-world gold supply, increasing the relative gold that each coin represents over time.
From its successful ICO price of $42 per coin, OGC is priced at $219 per coin (as of time of writing). Down from an ATH of $282, but still remarkably higher than the ICO price of $42. The price of one OGC is not directly correlated with the price of one gram of gold. This is because OGC is not locked in to being worth only one gram of pure gold equivalent, it continues to grow through its 1% transaction fee.
Tether seems to be great at trying to stay pegged on the price of one USD but there is very little excitement in that. With OGC, there seems to be more excitement in holding coins that are backed by an increasing amount of gold than owning coins that are simulated copies of the fiat dollar.