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What is a Stablecoin?

A type of cryptocurrency designed to maintain a stable value relative to a reference asset, often a fiat currency.

Key details

Stability
Aims to minimize price volatility.
Pegged
Usually pegged to a fiat currency, but can be pegged to other assets.
Collateralized
Often backed by reserves of the pegged asset or other cryptocurrencies.
Use Cases
Used for trading, savings, and as a medium of exchange.

Examples

  1. 01USDT (Tether) and USDC, fiat-collateralized stablecoins pegged to the US dollar.
  2. 02DAI, an over-collateralized, crypto-backed stablecoin.
  3. 03AMPL (Ampleforth), an algorithmic stablecoin that adjusts supply to maintain price.