#AbuDhabiStablecoin

What are stablecoins

‍Stablecoins or stable cryptocurrencies are a type of digital asset whose price is linked to that of another asset through a parity relationship. The most popular cases maintain a 1 to 1 relationship with the US dollar, while others are pegged to gold or other assets, including cryptocurrencies.

To maintain that relationship, stablecoins issued by projects like DAI, USD Coin, or USD Tether are based on four different backing models. Three of them are achieved through the deposit of an equivalent value, that is, collateral, whether in fiat money, crypto, or other assets.

The fourth model is that of algorithmic stablecoins, which rely on automated systems for price regulation, and have had examples of less firm supports.

There is much more to know about stablecoins, and everything is in the Guide to Stablecoins that we prepared at Ripio, where the cases of DAI, USDC, and USDT are explained in depth, along with all the technology that allows stable cryptocurrencies to exist.

In short: 1 Stablecoin = 1 USD.