Any project in which money is involved, those behind it, of course, are looking for returns on the investments deposited in it and looking for how to develop them.

Stable cryptocurrency projects are one of the projects that have succeeded in imposing themselves in the crypto market thanks to the advantages they offer that do not exist in the rest of the other cryptocurrencies from the advantage of stability and stability in value.

But the question is, how do stable cryptocurrency projects generate profits?

The answer, in short, is yes, it generates revenues, and in different ways, we will discuss it in this topic, beginning with:

Transfer Fee:

Glenn Goodman, author of The Crypto Trader, stated:

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Most of the stable cryptocurrency projects are designed to make a profit for their founders, usually from transfer fees.

There are many examples of revenue collection through fees, including what Tether uses when converting from Tether to dollars and the user may have to pay $ 50 in case the bank transfer process fails.

Tether also charges a fee of 0.1% for buying USDT and a fee of between 0.4% to 3% in the case of various transfers.

DGX coin also charges a transaction fee of 0.13%.

Indirect Revenue:

There are many stable cryptocurrencies that do not like to charge fees for their transactions and would like to use other indirect revenue methods like Paxos does where they do not charge any fees for transfers but they charge fees for using their currency indirectly.

And stable cryptocurrencies clearly contribute to increasing the liquidity of the trading platforms and thus increasing the trading volume.

Among the indirect income of fixed currencies is also that it is backed by interest bearing assets and therefore it generates income for its investors, which is what USDC currency does, which gets interest through the money deposited in its segregated reserve account, which means that it earns dollar deposits when withdrawing USDC.

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Are these revenues sufficient and keep the business stable?

The extent of the profit of stable cryptocurrencies from the aforementioned revenues from transfer fees and indirect revenues is difficult to answer due to the lack of sufficient data that shows the general record of the costs of managing a stable currency.

Respondents to this question are divided into two parts, some believe that the profit model adopted from stable cryptocurrency projects guarantees them to stay in the arena and continue, and some believe otherwise.

Says Entrepreneur Mark Jeffries:

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“I think they’re making a profit, yeah.”

“They are not technically complicated, the biggest cost is the provident fund to support everything. If you can secure a great investor to get started, you are good.”

As Doron Rosenblum says:

“As business models, they are likely not sustainable enough, and more advanced options can work more effectively.”

Among the problems facing stablecoins is their viability and that they are likely to face regulatory challenges that stand in their way.

Read also:

Swift: Cryptocurrencies are useless and unstable

Binance launches dollar-backed stablecoin and gets NYDFS approval

Tether is preparing to launch a new stable digital currency pegged to the Chinese yuan