Stablecoins are crypto assets designed to maintain a relatively stable value.
- Fiat-backed stablecoins are backed by reserves such as USD.
- Crypto-backed stablecoins use other crypto assets as collateral.
- Algorithmic stablecoins use rules or mechanisms to target price stability.
Stablecoins are commonly used for trading, payments, liquidity, and moving value across blockchain networks.
Stablecoins can face risks such as depegging, reserve issues, liquidity problems, or smart contract failures.
Stablecoins provide a stable-value option within the highly volatile crypto ecosystem.