A stablecoin is a type of cryptocurrency designed to maintain a stable value, typically linked to an asset such as a fiat currency (e.g., dollar, euro), a precious metal (gold), or another cryptocurrency. Its goal is to reduce the typical volatility of cryptocurrencies like Bitcoin. There are three main types: Fiat-backed: They are backed by reserves of traditional currency (e.g., #USDT, #USDC). Crypto-backed: They use other cryptocurrencies as collateral (e.g., #DAI). Algorithmic: They maintain their stability through algorithms that adjust supply (e.g., TerraUSD, before its collapse). They are used for transactions, savings, or as a store of value in the crypto ecosystem, combining the stability of traditional assets with blockchain technology.