PRT3)Commodity-Backed Stablecoins: #Stablecoins

These stablecoins are pegged to physical assets like gold, oil, or treasuries, for example Paxos Gold (PAXG) and Tether Gold (XAUT).

Crypto-Backed Stablecoins: #PAXG #XAUT

These are backed by digital assets and are typically overcollateralized to absorb price volatility. One example is MakerDAO’s DAI. 

Algorithmic Stablecoins: 

These maintain value by using a smart contract mechanism that dynamically adjust token supply based on market demand, essentially "printing" or "burning" tokens to keep the price close to a dollar peg. Alternatively, Frax Finance use a "fractional-algorithmic" approach, where a portion of its stablecoin is backed by collateral assets while the remaining portion is managed by the algorithmic mechanism, allowing for a balance between stability and potential for yield generation through the associated governance token (FXS).