Learning the basics of Stablecoins

What is the definition of a Stablecoin?

Stablecoins are cryptocurrencies designed to minimise the volatility of the price of the stablecoin, relative to some “stable” asset or basket of assets. — Wikipedia

A price stable cryptocurrency whose market price is pegged to another stable asset. — Blockgeeks

A stablecoin is a type of cryptocurrency that is designed to maintain a stable market price. — Binance Academy

Why use stablecoins?

Types of Stablecoins

Fully backed or algorithmic — Jimmy Song

Fiat Collateralized, Crypto Collateralized, Non Collateralized — Blockgeeks

Backed/Collateralized

  • Fiat — This is when you pay $1 in USD, EURO, AUD or another major currency and you get 1 stablecoin in return.
  • Assets/Commodity/Metal — This is when you pay $1 and you get 1 gram of gold, silver, or platinum, some oil or diamond, or maybe a square inch of prime real estate in New York.
  • Crypto — This is when you use cryptocurrencies to purchase your stablecoins.

Non backed/non collateralized

Fiat

How stable are Stablecoins?

Specific Stablecoins

Collateralized — Fiat

Collateralized — Commodity

Collateralized — Crypto

Non-collateralized (Seignorage shares)

Conclusion

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#BlockchainTrainer, #Tokenomics #STEM, http://theicotrain.com

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