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What Are the Three Main Types of Stablecoin Collateralization?

Fiat-backed (bank reserves), crypto-backed (over-collateralized crypto), and algorithmic (no direct collateral).
Greeks.Live28.10.25

What Are the Three Main Types of Stablecoin Collateralization?

The three main types are fiat-backed, crypto-backed, and algorithmic. Fiat-backed stablecoins are pegged 1:1 to a currency like the USD and hold the equivalent in a bank account.

Crypto-backed stablecoins use volatile crypto as collateral, often over-collateralized. Algorithmic stablecoins use smart contracts and seigniorage to maintain the peg without direct collateral.

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