Hi, I'm a normie who finally got into crypto in nov 2021. But I don't get stable coins. When you sell your crypto, why don't you just convert back to fiat and put that fiat into your bank account right away? I worry about stable coins becoming un-pegged; this is a big concern for me; it's an extra worry that you don't have if you just convert back to fiat right away.
I can see using stable coins as a trading pair to purchase alts on a dex but I don't understand holding stable coins for longer periods of time like weeks, months or years as a store of value; to me this feels way too risky. What am I missing?
Might be different if you could do a lot of your every-day normal shopping with stable coins but right now you can't.
Well, stable coins are as their name declares them: Stable. Meaning they don't really go up or down and are a safe haven when Bitcoin and all altcoins are dumping. You can think of trading your coin in for a stablecoin as shorting your coin 1x without having to worry about any liquidation limits.
Now, I myself would not trust just any old pegged stablecoin. I trust only the top (by volume). USDT, BUSD and so on. Anything else is too risky for me. Just like scammy DeFi platforms, scammy stablecoins are not that hard to create.