What Are Stablecoins and How Do They Maintain Their Value?
Stablecoins are cryptocurrencies designed to minimize price volatility by being pegged to a stable asset, most commonly the US dollar. They maintain their value through various mechanisms: being backed by fiat currency reserves (fiat-collateralized), backed by other cryptocurrencies (crypto-collateralized), or through algorithmic methods that automatically adjust supply and demand.
They bridge the gap between fiat and learn.
Glossar
Stablecoins
Peg ⎊ Stablecoins represent a class of cryptocurrencies engineered to maintain a stable value relative to a specified asset, typically a fiat currency like the US dollar.
Price Volatility
Dispersion ⎊ Price volatility within cryptocurrency, options, and derivatives markets represents the statistical degree to which asset prices deviate from their average over a defined period, reflecting inherent market uncertainty and risk.