what is a stablecoin

In its simplest form, a ‘stablecoin’ is a digital asset, on a blockchain, that is designed to maintain a consistent value, typically by linkage to the value of another asset.

Presently, there are 4 ways to design a stablecoin:

  1.  Algorithmic (derives value from a separate token specific to the stablecoin
  2.  Commodity Collateralized (derives value from a commodity, e.g., Gold)
  3.  Cryptocurrency Collateralized (derives value from other cryptocurrencies, e.g., ETH, BTC)
  4.  Fiat Collateralized (derives value from a fiat currency, e.g., USD, EUR)



Tether (USDT) versus TrueUSD (TUSD)