Bitcoin Forum

This is something that just came to my mind, do stablecoins have or under go halving?

Most stable coin I know are actually tokens and under the ethereum, tron or binance protocol. So they can't on their own go through halving. Maybe there are other stable coin that are new in the market, but I know the most popular stable coin is tether and its under ethereum protocol majorly. Halving can only be experienced when the coin has its own blockchain, just like bitcoin and when it's been programmed to undergo halving periodically, like bitcoin halving is every 4 years and lastly when it uses the proof of work (POW) Algorithm. I don't think halving can be effected on Proof of stake (POS).

No, Stable coins are not mined they were just created from no where like tokens.

You need to know what is halving to understand this better.

First of all I think that you may confuse the meaning of halving. Halving decreases the block reward the miners get for PoW coins. If you think that halving is related to price, then you are on wrong track completely (halving is not about price and stable coins' price is... meant to stay stable)

Now, stable coins are (at least usually) not mined (I don't think that there's any stable coin with PoW mining). If they are not mined then we can't discuss about halving of the block reward, right?

So simply put, stablecoins can't undergo halving because you can't
mine them,interesting....


@NeuroticFish I was thinking only in terms of total supply but from how you explained it kind of makes sense. Is it also safe to say only coins running on independent blockchains can go through halving

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@princecharles your explanation does make sense , if I have understood you well the halving process has to be written in the DNA of the coin/blockchain to go this process.

Exactly, coins with independent blockchain can undergo halving and also the premined coins cannot have halving event, because halving is nothing but reducing the block reward for the miners in to half and with bitcoin it happens every 4 years.

Halving means will make half reward, and of course, will give a positive effect on the price, And what about stablecoin, why need halving if the price is still stable, Halving didn't have any effect, so it was useless. As I know Stablecoin is build under the ethereum blockchain, so they can't do halving because can't control the blockchain. cmiiw

Stablecoins are not generated through mining. I wonder though if there are. I'm not familiar with all the projects in blockchain.

Havling is done to manage the coins economy. Stablecoin doesn't need economy management since its already stable no matter how much is its supply is, the price of stablecoin like USDT will still be $1.

Halving is only for coins not for tokens. That means the coin which has its own blockchain and can be mined can go to halving. But all the stable coins out there in the market are not coin they are token mostly running on Eth blockchain and TRX blockchain. They can not be mined. That's why Stablecoins won't have any halving.

No they cant. This makes absolutely no sense.

The amount of stable coins in circulation isn't related to block reward, but how much fiat the owner of the coins has in his bank account to back the tokens.

For example. Tether must have about 5billion usd in their bank account. It doesn't matter the block reward. When they get more fiat in the bank account they make more tokens.

Sorry for the misunderstanding, I just quoted part of it so you didn't understand what I tried to say there.

Stable coins cannot undergo halving, so OP is asking which coins can go halving that is why making clear about what is halving and which coins are undergo this.

What is a stablecoin?
So that if the company that creates a stablecoin increases their backed asset (in U.S. dollar, gold, silver, etc.) in their vault, they will be able to mint more stablecoin and increase its total supply.

It is difficult to know a stablecoin that is truly backed by a same value of asset in vault or reserve. USDT has many drama about its untransparent collateral in U.S. dollar. It means some people think that 1 USDT has its value less than 1 U.S. dollar.

being premined simply means before everyone else could access that coin (it didn't exist before) or start mining it the developer created a certain amount of that coin out of thin air. that doesn't mean they can't be mined or have future halvings. for instance ethereum started with 100% premine (about 72 million IIRC) and had its block rewards reduced (not exactly halving though since it is centralized and it was hard fork).

How about coins using POS protocol? They have independent blockchains too.

as long as there is a reward to be earned it can be changed. it doesn't matter who is receiving this reward (a miner or a master node or PoS nodes or DAG witnesses,...).
but the design of stable coins is in a way that they control the stability by controlling the supply not by halving it. for example if the price goes up, they can print more coins to reduce it and if it goes down then they can burn some to increase it. that is why all stablecoins created so far have been centralized.

I do not think it makes sense from an economical viewpoint to have a stablecoin become harder to be produced (at least not in a decentralized way) every X years. If you want it to be stable, you need to control the supply. Otherwise, supply would increase/decrease its value accordingly. Therefore, the probably only way a coin can be constantly stable is through centralization.

Like, if you had USDT suddenly turning from all those billions of coins into only a million while maintaining the exact same market and demand, wouldn't it boom even if it's supposed to be sitting at the price level of one USD?

No

Stable coin is fiat currency. In most cases USD.  It is just in form of digital asset. stable coin gets created when someone deposit 1 USD to stable coin creator bank account. And stable coin gets burned when someone want that USD back.

The stablecoins I know of are running on other networks and do not have a native chain. Tether for example was build on OMNI, then added ERC20 token on Ethereum and TRC20 on Tron.

The halving is a certain code written in Bitcoin that reduces mining rewards of new Bitcoins by half after 210,000 blocks are mined. Stables as tokens do not have their own blockchain. They have an audited code though which allows them to increase their total supply by minting new ones. They can also cut their supply by burning existing coins. They are centralized tokens currently.

wrong. a stable coin is not fiat currency, it is still another altcoin that has a more stable price compared to other altcoins.

theoretically that is true but realistically there is a lot of shadiness going on about all stable coins. for example the most popular one, tether, has never been properly audited and they have always been evasive about it. in short we are not convinced about them being able to honor 1:1 Tether:USD promise.
keep in mind there are currently near 10 billion Tether created!

This is the first time I get the idea of the the stable coin. I did not know of this complicated how stable coins work. Well, if this is the way stable coins work which means a hard job for the developers how they could get a compensation in doing this things? Is it just from the transaction fees they get? But, I know that this is only not that much especially if most transaction value are low. Besides, only the miners earn in this matter so I will try to figure it out if there are answers that could be provided. Good thing to have this forum where I can get some information. At least too that OP's thread was being answered where stablecoin halving will not going to happen because the supply is volatile to which it will not affect the market price of the stable coin.

This is why i always see tether that is stable in term of its market price. I was also curious that tether has good market capitalization and it even made in top of the list of coinmarketcap.com in accordance to crypto market capitalization. Is there any other stable coin except tether?

Wrong? Really?    So what will happen if right now Powell print 1000000000 trillion USD?   Will tether lose value against Bitcoin or not? Or will follow Bitcoin just like all other alt coins.  

Stable coins are digital asset that represent fiat currencies. The point of them to exist is so people dont need to declare profits to their tax office when exiting Bitcoin. They buy stable coin. It exposes them to fiat. When they decide to buy Bitcoin back they just do it. If they would ignore stable coin and bought USD with bitcoin they would need to pay tax.

Frankly, I have been thinking about this for several months and I searched for this matter and was able to get a result that there is no half for the stable currencies, as it has a stable price, and there will be no benefit to this price as it will remain the same. Unlike other currencies such as Bitcoin or Ethereum, where the half plays a major role in improving the prices of these currencies because they are unstable currencies and have different prices and witness large fluctuations in one day.