Stablecoins on Bitcoin - The Complete Guide to Stablecoins
In this section, we will cover what a crypto-collateralized stablecoin is and the different types of stablecoin that exists on Bitcoins.
In the overview section, we explained the different types of stablecoins. However, we would take a look at what a crypto-collateralized stablecoin is, and explore the dirafferent stablecoins backed by cryptocurrencies like Bitcoin, and Rootstock.
Stablecoins exist on different blockchains. Crypto-collateralized stablecoins are backed by cryptocurrencies. A crypto-collateralized stablecoin is oftentimes over-collateralized to achieve the target stability of assets pegged to it.
Bitcoin is the most liquid cryptocurrency. It has the largest market capitalization and the largest user base. Its development team is led by brilliant minds who follow a strict development protocol that privileges stability, robustness, and immutability over new features that could compromise network security.
By using bitcoin as collateral, a stablecoin can incorporate decentralization and censorship resistance properties that characterize bitcoin. In addition, it minimizes counterparty risks found in other stable currencies, such as traditional bank accounts if they use fiat currencies as collateral, or use less established crypto assets as collateral that may be less efficient to use.
Some examples of these tokens backed by Bitcoin, are DOC, RDOC, and XUSD
DOC: Dollar on Chain
The Dollar on Chain or DOC stablecoin is one of the main assets on the Money on Chain DeFi platform. DOC is collateralized with bitcoin with a 1:1 USD peg guaranteed by the smart contract. It offers the best collateral as it doesn’t rely on fiat. All the collateral is bitcoin. Its stability is guaranteed by the Smart Contract. What makes DOC unique is that the DOC collateral is not held in a third-party bank account, but within smart contracts on the Rootstock network, which is the most secure smart contract network.
Watch this explainer video below to understand more about DOC.
RDOC: RIF Dollar on Chain
The RIF Dollar on Chain or RDOC stablecoin is one of the main assets on the RIF on Chain DeFi platform. RIF on Chain is powered by Money on chain, a stablecoin and leveraged token protocol, which runs on Rootstock smart contracts.
RDOC is a crypto-collateralized stablecoin that uses the RIF token as collateral. It’s 1:1 pegged to the US Dollar guaranteed by the smart contract.
Unlike the majority of other DeFi protocol stablecoins where users are required to provide collateral or a collateralized debt position to borrow funds - similar to the Ether-backed decentralized stablecoin DAI - RDOC can be acquired by platform users directly by spending RIF, which is a unique feature that some users may prefer.
Watch this explainer video below to understand more about the RDOC token.
BabelFish is a cross-chain protocol that aggregates stablecoin liquidity from multiple issuers and chains into one single token: XUSD.
XUSD is a USD-pegged stablecoin that acts as a decentralized aggregator and distributor of different stablecoins. XUSD can be exchanged and redeemed 1:1 with any of the underlying stablecoin tokens backing it using smart contracts.
It allows users to easily bridge multiple stablecoins from Rootstock and Ethereum networks to XUSD, and in reverse.
Watch this explainer video below to understand more about the XUSD token.
Be sure to check out our next article in this guide, on How to Store Stablecoins on Rootstock - The Complete Guide to Stablecoins
If you would like to delve deeper, here are some resources and tools that we recommend.
- Visit Rootstock Github
- Dollar on Chain: A stablecoin for bitcoiners, by bitcoiners
- Defiant: Solutions on Rootstock
- Rootstock Token Bridge
- Webinar: Rootstock - Ethereum Tokenbridge
- Build on Bitcoin using rDAI
- Ask any Difference
- Difference between a Cryptocurrency and Token
- What are Stablecoins?
- Rootstock Explorer