<p>GDAX, or Gemini Dollar, is a stablecoin pegged to the U.S. dollar. It's a type of cryptocurrency designed to maintain a stable value, making it a popular choice for traders and investors seeking to mitigate volatility.</p>

<h2>How It Works</h2>
<p>GDAX is an ERC-20 token, meaning it runs on the Ethereum blockchain. It's backed by the U.S. dollar on a 1:1 basis, with each GDAX token representing one U.S. dollar held in reserve. The stability of GDAX is maintained through a process called 'arbitrage,' where traders buy and sell GDAX to keep its price close to $1.</p>
<p>Gemini Trust Company, LLC, a New York trust company, acts as the issuer and administrator of GDAX. It ensures that the GDAX in circulation is fully backed by U.S. dollars or other assets held in custody.</p>

<h2>Why It Matters</h2>
<p>GDAX matters because it provides a stable, low-volatility option for traders and investors in the cryptocurrency market. This stability makes GDAX useful for:</p>
<ul>
<li>Traders looking to exit positions quickly without the risk of price fluctuations.</li>
<li>Investors seeking to park funds in a stable asset while waiting for market conditions to improve.</li>
<li>Cross-border payments, as GDAX can be transferred quickly and cheaply compared to traditional methods.</li>
</ul>
<p>For instance, during the 2017-2018 cryptocurrency market downturn, GDAX served as a safe haven for many investors, allowing them to preserve their capital while waiting for market conditions to improve.</p>