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2. Intermediate Course

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  1. 1. What is Layer 0 in Blockchain technology?
  2. 2. What is layer 1 in Blockchain?
  3. 3. Second layer (layer 2) - what is it? 
  4. 4. Blockchain and its layers - What is layer three in Blockchain (L3)?
  5. 5. Ethereum 2.0 - What is it? 
  6. 6. Ethereum Proof-of-Stake (PoS) - what should you know?
  7. 7. Ethereum London Hard Fork - what is it ? 
  8. 8. What is the Ethereum Name Service (ENS) and how does it work?
  9. 9. Arbitrum: Ethereum scaling solution - everything you need to know
  10. 10. Polygon 2.0 - the value layer for the Internet
  11. 11. Ethereum ERC-4337 - what is it and how does this standard work?
  12. 12. What is an ERC20 token and how is it created?
  13. 13. The ERC-721X VS ERC-721 Standard – Key Differences!
  14. 14. What is cryptocurrency burning?
  15. 15. Examples of the use of WEB3 on the blockchain
  16. 16. What is Web5? 
  17. 17. Blockchain Oracle - what are oracles? 
  18. 18. Polkadot - Decentralized blockchain and DOT cryptocurrency
  19. 19. Polkadot Parachain - Next-generation blockchain
  20. 20. Interoperability in the world of cryptocurrencies and blockchain
  21. 21. What is Blockchain sharding?
  22. 22. Mainnet versus Testnet on the Blockchain. The complete guide!
  23. 23. MINA Protocol: the lightest blockchain in the world!
  24. 24. Sustainable Blockchain - Proof of Useful Work & Flux
  25. 25. Cosmos SDK: Building the Blockchain Ecosystem
  26. 26. What is cross-chain interoperability in Blockchain technology?
  27. 27. Blockchain trilemma - explanation of the problem. What is the impact on cryptocurrency payments?
  28. 28. Non-fungible tokens and NFT exchanges
  29. 29. How to make money with NFT?
  30. 30. What is the NFT licence fee?
  31. 31. NFT Gas Fee - what is it? How can you reduce your gas fee?
  32. 32. The main differences between static NFT and dynamic NFT
  33. 33. What is minting an NFT?
  34. 34. What are NFT Ordinals? A guide to Bitcoin NFT.
  35. 35. What is KnowOrigin NFT, and how does it work?
  36. 36. ERC-6551 - the new NFT standard. What does it bring to the non-exchangeable token sector?
  37. 37. What is NFT Lending all about? An innovative solution in the world of cryptocurrencies!
  38. 38. The Metaverse – a new virtual world
  39. 39. Metaverse – TOP 15 virtual reality projects
  40. 40. Technical analysis – is it worth using?
  41. 41. Trading order types: stop loss, trailing stop loss, LIMIT
  42. 42. Market Cap versus Fully Diluted Market Cap - the most important differences you should know!
  43. 43. Set up of Stop Loss and Take Profit orders
  44. 44. What are DeFi liquidity pools?
  45. 45. Real Yield in DeFi - what is this trend? What does it consist of?
  46. 46. Vampire Attacks in Decentralized Finance (DeFi): Explanation and Examples
  47. 47. What are wrapped tokens 
  48. 48. What are security tokens?
  49. 49. What are Social Tokens? 
  50. 50. Liquidity Provider Tokens (LPs). What are they, and why are they so important?
  51. 51. What is the Lightning Network, and how does it work?
  52. 52. What is Play-to-Earn (P2E) and how does it work?
  53. 53. Cryptocurrency steps - What is move to earn M2E?
  54. 54. Segregated Witness - what is Segwit Bitcoin all about?
  55. 55. What are Decentralized Cryptocurrency DEX Exchanges?
  56. 56. What is Curve Finance?
  57. 57. What is GameFi and how does it work?
  58. 58. What is Proof of Reserves (PoR)? How does it work?
  59. 59. DAO Investment: A revolution in the world of finance and investment
  60. 60. What is MakerDAO and DAI Stablecoin?
  61. 61. What is the SubDAO protocol, and how does it work?
  62. 62. How to Create Your Own Decentralized Autonomous Organization (DAO)?
  63. 63. Atomic Swap: What is an atomic swap, and how does it work with cryptocurrencies?
  64. 64. What Is Cryptocurrency Vesting? What Are Its Advantages?
  65. 65. What Is the Metaplex Candy Machine Protocol? How Does It Work?
  66. 66. What Is the BNB Greenfield Ecosystem?
  67. 67. What Is Slashing in Cryptocurrencies?
  68. 68. Royalties – What Are They? How Does This Type of Licensing Fee Work?
  69. 69. What is TradFi? The importance for cryptocurrencies!
  70. 70. What is the Real World Asset (RWA) trend in cryptocurrencies? Explanation and examples!
  71. 71. Pyth Network: a powerful oracle harnessing the power of Solana!
  72. 72. What are stables in the world of cryptocurrencies?
  73. 73. What Is Binance Oracle?
  74. 74. Shibarium: A new era in the Shiba Inu ecosystem?
  75. 75. What is an ETF? How will an exchange-traded fund on bitcoin work?
  76. 76. Symmetric and asymmetric encryption - key cryptography techniques!
  77. 77. Hedging in cryptocurrencies - great portfolio protection against risk!
  78. 78. How to create your own cryptocurrency? 
  79. 79. What is a Dusting Attack in cryptocurrencies? How to protect against it?
  80. 80. What is a Black Swan?
Lesson 72 of 80
In Progress

72. What are stables in the world of cryptocurrencies?

As a trader, you are well aware that one of the challenges we face daily in the world of cryptocurrencies is their fluctuating exchange rates. When the price of Bitcoin falls, it can significantly impact the purchasing power of stablecoins and make it challenging to pay for goods and services denominated in USD. 

This volatility often leads traders to consider selling Bitcoin for USD during market downturns. Enter stablesats, a solution to this problem.

But who came up with the idea for stablesats? On August 3, 2022, a company called Galoy Inc. added a new feature to its platform – stablesats. These serve as an alternative to stablecoins or fiat bank integration. 

In today’s lesson, we will explore this creation in detail, discussing what stablesats are and how they work.

Stablesats – Definition

Stablesats, as mentioned earlier, serve as an alternative to stablecoins or integrating with traditional banking systems. They utilize smart contracts to create a synthetic dollar backed by Bitcoin, effectively linked to USD. This enables users to maintain USD-equivalent accounts within lightning wallets, addressing one of the most significant challenges faced by BTC users – short-term exchange rate volatility.

Interestingly, stablesats do not rely on stablecoins or tokens other than Bitcoin at their core. This unique approach results in improved interoperability and lower fees for users. Since stablesats do not require integration with banking systems, they can be brought to market relatively quickly.

What makes the new feature proposed by Galoy even more remarkable is its ability to allow Bitcoin wallet users to lock in a specific value of BTC to a specific dollar amount without being affected by volatility.

How do stablesats work?

The Galoy platform stabilizes BTC users through derivatives known as perpetual inverse swaps. These instruments enable investors to gain better exposure to the future value of Bitcoin by taking long or short positions on the asset. Unlike traditional futures contracts, perpetual inverse swaps have no expiration date, allowing contract holders to settle with the exchange at their convenience.

One of the dedicated wallets where stablesats can be used is the Bitcoin Beach Wallet. Users of this wallet can choose to store their Bitcoins in an account denominated in either BTC or USD.

If they opt for the latter, the Galoy platform transfers their sats to its partner exchange, opens a short position, and utilizes their BTC as collateral.

This short position effectively hedges the user’s BTC in dollar terms against any fluctuations in the price of Bitcoin. Any gain or loss on this contract offsets potential increases or decreases in the value of the security.

Why start using stablesats?

The primary motivation for using stablesats is their ability to address the price fluctuations associated with the Bitcoin economy. This is especially crucial when the price of BTC falls, making it challenging for holders to purchase USD-denominated products. Below, we examine the pros and cons of stablesats.


  • No Need for Banking Access: Stablesats solely rely on Bitcoin, eliminating the need for access to traditional banking systems.
  • Low Fees: Stablesats operate with access to the Lightning Network, known for its virtually cost-free and immediate settlement capabilities.
  • Full Collateralization: Each USD liability held by Galoy is backed by an equivalent amount in BTC, distinguishing stablesats from stablecoins.


  • Trust in Centralized Exchange: Users must trust the centralized exchange, similar to the trust placed in banks for traditional fiat currencies.
  • Risk of Losing USD Access: In the unlikely event of bankruptcy by any of the involved institutions, clients could lose access to their USD.
  • Automatic Leverage Reduction: Stablesats can automatically reduce leverage, which may leave the Galoy platform and its clients under-protected.

Interesting facts about the synthetic USD

Synthetic USD is not a new concept; it has been discussed and explored in the crypto space for some time. For instance:

  • In 2015, Arthur Hayes discussed the creation, storage, and spending of synthetic assets, pioneering the topic.
  • In 2021, a project called Standard Sats presented the idea of eurobitcoins.
  • In early 2022, Kollider introduced the concept of synthetic stablecoins on the Lightning Network.

Now, stablesats have emerged as a practical solution for Lightning Network users seeking protection from volatility.


Stablesats offer more security than algorithmic stablecoins and are less susceptible to banking system movements. Importantly, the derivative contracts created for stablesats are fully collateralized by BTC, ensuring that each USD liability has an equivalent BTC backing.

As a stablesats holder, you don’t need to worry about the blockchain your counterparty is using; they are fully interoperable with anyone using BTC and the Lightning Network.

Complete today’s lesson!

  1. Interoperability in the World of Cryptocurrencies and Blockchain
  2. What Are Synthetic Assets in Cryptocurrencies?
  3. Algorithmic Stablecoins – Everything You Should Know About Them