Exploring Stablecoins
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Exploring Stablecoins
A stablecoin is a digital currency created with the intent of holding a stable value. The value of most existing stablecoins is tied directly to a predetermined fiat currency or tangible commodity. However, stablecoins can also achieve price-stability through collateralization against other cryptocurrencies or algorithmic token supply management.
Jay Drain Jr • Web3 Starter Pack
Not all stablecoins are the same as they employ different mechanisms to keep their peg against USD. There are three types of stablecoins—fiat-collateralized, crypto-collateralized, and algorithmic stablecoins. Most stablecoins use the fiat-collateralized system to maintain their USD peg.
Sze Jin Teh • How to DeFi: Beginner
The prices of cryptocurrencies are extremely volatile. In order to mitigate this volatility, stablecoins pegged to other stableassets such as the USD were created. Stablecoins help users hedge against this price volatility and allow for a reliable medium of exchange. Stablecoins have since quickly evolved to be a vital component of DeFi that is piv
... See moreSze Jin Teh • How to DeFi: Beginner
Traditionally, the crypto community distinguished between the following types of stable tokens: (i) fiat-collateralized or commodity-collateralized stable tokens, (ii) crypto-collateralized stable tokens, and (iii) algorithmic stable tokens. Lately (iv) central banks have also started looking into tokenizing their currencies which already come with
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