What is a Stablecoin?
A stablecoin is a cryptocurrency that aims to maintain a constant value relative to a reference asset, typically the US dollar.
Types
- Fiat-backed: USDC, USDT (backed by reserves)
- Crypto-backed: DAI (overcollateralized crypto)
- Algorithmic: FRAX (partial algorithmic)
Use Cases
- Trading pairs
- Yield farming (low IL risk)
- Store of value in crypto
- Cross-border payments