Crypto-collateralized stablecoins are coins that are backed by other cryptocurrencies. Since the reserve cryptocurrency may also be prone to high volatility, such stablecoins are “over-collateralized” — that is, a larger number of cryptocurrency tokens is maintained as a reserve for issuing a lower number of stablecoins.
For example, $2,000 worth of ether may be held as reserves for issuing $1,000 worth of crypto-backed stablecoins which accommodates for up to 50% of swings in reserve currency (ether). Frequent audits and monitoring add to price stability.
Work USD (WUSD) is a crypto-collateralized stablecoin, that is used to pay for work on the WorkQuest platform when creating a smart contract between an employer and employee. It can be used to exchange for another cryptocurrency or withdraw to a bank card on the WorkQuest platform.
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