1. Backing Mechanism
• Fiat-backed Stablecoins (USDT, USDC, BUSD, TUSD, etc.): These stablecoins are backed 1:1 by cash or cash equivalents (such as treasury bills) held in bank reserves.
• Crypto-backed Stablecoins (DAI, sUSD, etc.): These stablecoins are backed by over collateralised crypto assets (e.g., Ethereum locked in a smart contract).
• Algorithmic Stablecoins (FRAX, UST - before collapse, etc.): These rely on smart contracts and algorithms to maintain their peg, sometimes using a secondary token for stability.
• XUSD: The backing mechanism of XUSD depends on its specific issuer. It could be fiat-backed, crypto-backed, or algorithmic. Do you have a specific version of XUSD in mind?
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