USD Coin (USDC): Is it a safe investment?

USD Coin (Symbol: USDC) is a stablecoin pegged to the U.S. dollar on a 1:1 basis.
USDC functions as an ERC-20 standard token on the Ethereum blockchain, facilitating use in smart contracts, including DeFi applications.As a stablecoin, USDC aims to provide the advantages of blockchain technology such as 24/7, global and fast transactions without price volatility. Like most other stablecoins, USDC is issued by a centralized entity that is allowed to blacklist addresses and freeze tokens.With new features and solid fundamental security, USDC stands out from many competitors by offering better financial transparency and regulation.Considered collateral in the MakerDAO system, USDC is used extensively in popular DeFi apps such as Compound and Aave.USDC issuance is based on the mint-burn mechanism, meaning that an issuer serves as a third party supporting USDC minting or USDC redemption for dollars. USDC’s operation follows three steps, including:
To mint USDC: A user transfers US dollars to a token issuer's bank accounts.New USDC tokens will be minted by Circle, the crypto finance behind USDC, and sent to the user's wallet addresses.To redeem USDC for dollars: Users can convert the USDC back into US dollars by returning their USDC to the issuer’s crypto wallet to receive the equivalent amount of dollars.Similar to other US Dollar-backed stablecoins such as Tether (USDT) and Dai (DAI), USDC tends to maintain its value regardless of the market volatility.
Apart from a medium of exchange, USDC shows the following major cases of use:USD Coin is a stablecoin launched in 2018 by CENTRE - a consortium established by prominent cryptocurrency industry companies Coinbase and Circle.
As a founding member and the creator of the core technology and IP behind CENTRE, Circle is a peer-to-peer payment services company backed by leading venture and strategic investors, notable of which are IDG Capital, Breyer Capital, General Catalyst Partners, Goldman Sachs, and Everbright Bank. The second founding member behind CENTRE is Coinbase - a secure crypto exchange. As a leading crypto exchange, Coinbase significantly contributed to the creation of USDC through development and insights, facilitating the launch and marketing to the crypto audience.Being backed by leading DeFi protocols and centralized exchanges, as of 2021, the USDC market supply experienced a sudden surge from $4 billion to more than $50 billion. With prominent features and a current market capitalization of $73 billion, USDC is setting its name as the world’s second-largest stablecoin, only behind Tether (USDT), and also the fourth-largest cryptocurrency
Amid the collapse of TerraUSD (USTC), USDC still maintained its value equal to one dollar, proving itself a formidable competitor in the crypto market. Explore all the trending topics and hottest news in the crypto market with our Blogchain.Meanwhile, practice trading, play virtual money, and earn real tokens with CryptoSim - Virtual Trading Game.