How media buyers can work with cryptocurrency: overview of stablecoins from Simple Wallet

AFFHUB is here! And today we have decided to discuss cryptocurrency. After all, everyone who enters the affiliate sphere should understand at least the basic principles of cryptocurrency—the fundamental method of payment for most products in this niche. 

Today, we won’t be talking about trading, earning money on cryptocurrency, etc. We decided to focus on the main methods of calculation — stablecoins. How they work, what needs they are suitable for, which stablecoin to choose for work, and where to store them — AFFHUB Media will tell you all about this together with the Simple project.

What is a stablecoin? 

First, let’s figure out the basic term. A stablecoin is a type of cryptocurrency which price is pegged to a stable value. This can be a separate currency, a valuable resource, etc.

Simply put, a stablecoin is a crypto version of the dollar, euro, or any other currency or valuable resource. We will talk about the types of stablecoins a little later. But as an example, one of the most common stablecoins is USDT. Its value is always equal to one dollar.

Traders use stablecoins primarily to be able to buy other cryptocurrencies or lock in profits. For example, you have 108,000 USDT and can buy 1 BTC with this money (at the time of writing). Then, when the price rises, you can sell BTC at a higher price. The calculation method will again be USDT, which you can later withdraw in fiat currency — hryvnia, dollars, euros, etc.

However, many people use stablecoins for settlement purposes. Since it is always equal to a certain currency, it is convenient for companies or individuals to use this method to pay for various services. And given the minimal commission (from one cent to a few dollars), this method of settlement becomes more profitable than currency transfers between banks. 

Stablecoins: list, types, and differences

Probably, everyone has wondered at some point how stablecoins maintain their constant value. After all, BTC and other cryptocurrencies constantly rise and fall depending on the activity of market participants.

The fact is that it is kept at this level thanks to various mechanisms. In general, there are three of them: 

1. Fiat-backed. These stablecoins are pegged to real currency and backed by corresponding fiat reserves. In other words, each stablecoin issued has an equivalent in real currency — dollars, euros, etc.
2. Backed by cryptocurrencies. The collateral for such stablecoins is another cryptocurrency. Since the collateral is stored in smart contracts, such stablecoins are more decentralized;
3. Algorithmic. In fact, such stablecoins are not backed by other assets. Their stability is maintained using algorithms and smart contracts. Against this backdrop, there are cases when algorithmic stablecoins lose their peg to the currency, as happened with TerraUSD in 2022 (this stablecoin is now worth 1 cent, whereas previously its value was 1 USD).

There are a significant number of stablecoins on the market. Here are the top 10 by market capitalization (as of the time of writing): 

• USDT;
• USDC;
• USDS;
• USDe;
• USD1;
• FDUSD;
• PYUSD;
• TUSD;
• RLUSD;
• USDD.

As we can see, the ten most popular stablecoins are all pegged to the dollar. EURC, a stablecoin pegged to the euro, ranks 11th in terms of capitalization. 

Which stablecoin should media buyers choose?

At first glance, it may seem that most people use USDT. Therefore, the question is practically closed. Indeed, USDT is one of the simplest payment options, including for media buyers. However, it is far from the only one. Therefore, we turned to representatives of Simple, a universal wallet for stablecoins, for the answer to this question.

How should media buyers choose a stablecoin for their needs?

Webs should choose stablecoins based on their liquidity on key exchanges, transaction speed, and support in various blockchain networks. The most common assets, such as USDT and USDC, usually offer the best opportunities because they are easy to buy, sell, and move between platforms. Evaluate which networks (e.g., TRON, BSC, Polygon, ETH, SOL) have the lowest fees to optimize costs.

What to look for when choosing a stablecoin?

When choosing a stablecoin, it is critical to analyze its collateralization and the transparency of the issuer. Make sure that the company (if it is public) regularly publishes reserve audits confirming a 1:1 peg to the underlying asset. Also, pay attention to the stability of the exchange rate in the past and the reputation of the stablecoin in the community.

Are there any stablecoins that should be avoided at all costs?

Yes, you should be very cautious about algorithmic stablecoins that do not have direct fiat backing, as they have proven to be highly risky. Also, avoid little-known projects with low capitalization and opaque management structures. Reliability is key for arbitrage, so it is better to choose time-tested assets.

In which cases is it better to keep stablecoins in a wallet, and in which cases on an exchange?

Only keep the funds you need for active trading on an exchange to ensure maximum response speed. It is much safer to keep your main capital and profits in a noncustodial wallet, such as Simple, where you have complete control over your assets. This protects you from the risks of funds being frozen, exchanges being hacked, or becoming insolvent. Some exchanges may require confirmation of the origin of funds as part of KYC/AML procedures, which can create additional steps when working with large amounts. At the same time, noncustodial wallets do not have such problems.

So, for most needs, media buyers are better off focusing on wallets?

Absolutely correct, because a wallet serves as your personal secure financial hub from which you manage flows to various platforms. Using a wallet to store the bulk of your capital is a fundamental rule of risk management. This allows you to diversify the risks associated with centralized platforms and maintain complete control over your money.

What should you look for when choosing a wallet?

When choosing a wallet, pay attention to its security, support for the stablecoins and blockchain networks you need, and the convenience of the interface. It is important that it is a noncustodial wallet where only you have the private keys. Media buyers will also find useful features that allow them to easily switch between networks and quickly send assets.

Why choose Simple as a universal wallet for stablecoins?

Simple was created as the ideal “Stablecoin Wallet” solution, making it an excellent choice for working with stablecoins. We support all popular stablecoins on different networks, allowing you to manage all your assets in one convenient and secure interface. Most importantly, Simple is a multichain wallet that allows you to send and receive cryptocurrency from many different networks. For media buyers, this means time savings, low fees, and complete control over capital, which are key factors for success. 

Instead of conclusions

Cryptocurrency has long been a part of modern life, including for media buyers. Therefore, even a basic understanding of it in the market is not an advantage, but a minimum requirement. It is necessary for receiving payments, sending payments, and, of course, storing savings. And to keep your money safe, check out Simple, a universal wallet for stablecoins.

This material was created with the support of Simple. This material is for informational purposes only and does not constitute financial advice. *A European tax number is required to open a card in Simple Wallet.