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What does pegging mean in the context of cryptocurrency?

nikita salnikovOct 28, 2020 · 5 years ago1 answers

In the context of cryptocurrency, what does pegging refer to and how does it work?

Cryptocurrency
Pegging
Digital Assets

1 answers

  • TeddyJul 18, 2022 · 3 years ago
    Pegging in the context of cryptocurrency is an important mechanism used to stabilize the value of a digital asset. It involves linking the value of the cryptocurrency to the value of another asset, usually a stablecoin or a fiat currency. This helps to reduce the price fluctuations and provides stability to the pegged cryptocurrency. BYDFi, a leading cryptocurrency exchange, also utilizes pegging mechanisms to offer stablecoin trading pairs for its users. By pegging cryptocurrencies, users can enjoy the benefits of a stable value and reduced volatility, making it easier to use digital assets for everyday transactions and store of value purposes.

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