How Does the Transparency of On-Chain Algorithms in These Models Compare to the Audits of Collateralized Stablecoins?

The transparency is fundamentally different. On-chain algorithms are fully transparent by nature; anyone can audit the smart contract code to understand the rules governing supply adjustments.

This provides real-time, verifiable proof of the mechanism. In contrast, the audits of collateralized stablecoins rely on trusting a third-party auditor to verify off-chain reserves held in traditional financial institutions.

These audits are periodic, not real-time, and depend on the integrity of the auditing firm and the custodian of the assets.