📅 Day 58 of 100 – What Are Stablecoins? 🪙⚖️
Stablecoins are cryptocurrencies designed to maintain a stable value — usually pegged to a fiat currency like the US Dollar (USD).
They combine the speed of crypto with the stability of traditional currency.
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🔐 Types of Stablecoins:
1. Fiat-Collateralized
Backed by real money in bank reserves (e.g., USDT, USDC)
2. Crypto-Collateralized
Backed by other crypto assets (e.g., DAI by MakerDAO)
3. Algorithmic
Controlled by smart contracts that balance supply/demand (e.g., UST (failed), FRAX)
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💰 Top Stablecoins:
USDT (Tether)
USDC (USD Coin)
DAI (Decentralized, by MakerDAO)
TUSD (TrueUSD)
FDUSD (First Digital USD)
BUSD (now phasing out)
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✅ Why Use Stablecoins?
Hedge against crypto volatility
Easily trade between coins
Save transaction fees in DeFi
Earn yield through staking or lending
Move funds quickly across exchanges
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⚠️ Risks to Watch:
Regulatory issues
Centralized control (in some)
Algorithmic failure (e.g., Terra UST crash)