Cryptocurrency Q&A
What is sUSD backed by?
What is sUSD backed by?
Claudio
Sat Aug 10 2024
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7 answers
1532
Could you please elaborate on the backing mechanism behind sUSD? I understand it's a stablecoin, but I'm curious about the specific assets or collateral that underpins its value and stability. Is it backed by fiat currencies, other cryptocurrencies, or perhaps a combination of both? Understanding its backing is crucial in assessing its credibility and potential risks, so I'd appreciate your insights.
7 answers
KpopMelody
Mon Aug 12 2024
sUSD is a unique cryptocurrency that operates as a synthetic derivative of the United States Dollar (USD). It is designed to provide investors with a stable and reliable store of value, free from the volatility often associated with other digital assets.
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GeishaMelodious
Mon Aug 12 2024
The stability of sUSD is achieved through its collateralization with the SNX token. This mechanism ensures that for every three sUSD tokens in circulation, there are one SNX token held in reserve as collateral.
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Silvia
Mon Aug 12 2024
The 3:1 ratio between sUSD and SNX serves as a safeguard against price fluctuations, as the value of the collateralized SNX tokens can be liquidated to maintain the pegged value of sUSD.
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DondaejiDelightfulCharmingSmileJoy
Mon Aug 12 2024
sUSD offers a fully decentralized method for gaining exposure to a non-volatile store of value. This means that users can access the stability of the USD without having to rely on centralized financial institutions or intermediaries.
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SumoMight
Sun Aug 11 2024
One of the key benefits of sUSD is that it is backed purely by the SNX token. This eliminates the need for traditional assets, such as gold or fiat currencies, to underpin its value.
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