![Trading is to follow [Review Video] Gold Bitcoin Crude Oil Orders Make Profits!](/uploads/2025/04/26/cryptocurrencies-news/videos/trading-follow-review-video-gold-bitcoin-crude-oil-profits/image-1.webp "Trading is to follow [Review Video] Gold Bitcoin Crude Oil Orders Make Profits!")
-
Bitcoin $94,725.6175
1.22% - Ethereum
$1,808.5443
2.04% - Tether USDt
$1.0004
0.01% - XRP
$2.2292
1.62% - BNB
$604.7907
-0.55% - Solana
$152.0582
-0.61% - USDC
$0.9998
0.00% - Dogecoin
$0.1874
3.12% - Cardano
$0.7291
1.58% - TRON
$0.2463
1.01% - Sui
$3.5840
1.14% - Chainlink
$15.1757
0.39% - Avalanche
$22.6125
1.35% - Stellar
$0.2960
5.46% - Shiba Inu
$0.0...01469
4.50% - UNUS SED LEO
$9.0503
-2.18% - Hedera
$0.1967
3.40% - Toncoin
$3.2494
-0.62% - Bitcoin Cash
$370.9112
2.92% - Polkadot
$4.3201
-0.37% - Litecoin
$87.7954
3.52% - Hyperliquid
$18.2729
-2.10% - Dai
$1.0001
0.01% - Bitget Token
$4.4761
0.25% - Ethena USDe
$0.9996
0.00% - Pi
$0.6519
-0.44% - Monero
$228.1214
-0.28% - Pepe
$0.0...09572
8.90% - Uniswap
$5.9635
1.77% - Aptos
$5.6261
0.87%
What Is an Algorithmic Stablecoin?
Algorithmic stablecoins, lacking real-world collateral, utilize a dynamic supply-demand mechanism to maintain a target price through minting or burning tokens, offering decentralization and inflation resistance but also posing risks of volatility and algorithmic failures.
Oct 16, 2024 at 03:13 pm
What Is an Algorithmic Stablecoin?
1. Definition
An algorithmic stablecoin is a type of cryptocurrency whose value is pegged to a target currency, such as the US dollar, through an algorithmic mechanism that adjusts the supply and demand of the stablecoin. Unlike fiat-backed stablecoins, algorithmic stablecoins do not hold any real-world assets as collateral.
2. Mechanism
Algorithmic stablecoins maintain their peg through a combination of two processes:
- Expansionary: When the stablecoin price falls below the target, the algorithm mints new tokens, increasing the supply. This drives up the demand and price of the stablecoin.
- Contractionary: Conversely, when the stablecoin price rises above the target, the algorithm burns tokens, decreasing the supply and reducing the price.
3. Stability Mechanisms
Algorithmic stablecoins use various mechanisms to ensure price stability, including:
- Seigniorage: Profits from the expansionary and contractionary processes are used to incentivize holders and stabilize the price.
- Oracle: The algorithm relies on oracles to provide accurate data on the target currency's price.
- Feedback Loop: The expansionary and contractionary processes create a negative feedback loop that helps the stablecoin converge to the target price.
4. Examples of Algorithmic Stablecoins
Some notable algorithmic stablecoins include:
- TerraUSD (UST)
- Dai (DAI)
- Basis Cash (BAC)
- Fei Protocol (FEI)
5. Advantages
- Decentralization: Algorithmic stablecoins are not backed by a centralized entity, making them more resistant to censorship.
- Inflation Resistance: The contractionary mechanism can help mitigate inflation by reducing the supply of the stablecoin.
- Programmatic Transactions: Algorithmic stablecoins can facilitate programmable transactions, such as automatic payments or decentralized exchanges.
6. Risks
- Volatility: Algorithmic stablecoins can experience significant price fluctuations while maintaining their peg.
- Algorithmic Failures: The complex algorithms used in algorithmic stablecoins can introduce potential vulnerabilities.
- Dependence on Oracles: The accuracy of the stablecoin's price peg relies heavily on the accuracy of the oracles used.
Disclaimer:info@kdj.com
The information provided is not trading advice. kdj.com does not assume any responsibility for any investments made based on the information provided in this article. Cryptocurrencies are highly volatile and it is highly recommended that you invest with caution after thorough research！
If you believe that the content used on this website infringes your copyright, please contact us immediately (info@kdj.com) and we will delete it promptly.
- Bitcoin (BTC) Price Action Signals the Potential Start of a Major Recovery Rally
- 2025-04-26 15:15:13
- Codename: Pepe Crypto is Fascinating the Crypto World Now that Market Excitement is Increasing
- 2025-04-26 15:15:13
- A new global initiative Accelerator of Blockchain for Good Alliance has been launched
- 2025-04-26 15:10:13
- Token-Shuffle: Scaling Autoregressive Models to High-Resolution Images
- 2025-04-26 15:10:13
- Could XRP Really Hit $100? Unveiling the Future of This Controversial Cryptocurrency
- 2025-04-26 15:05:13
- XRP Is at a Critical Point Because It Has Remained in a Vital Support Region
- 2025-04-26 15:05:13
Related knowledge
Top 10 digital currency exchange platforms recommend digital currency exchanges
Apr 26,2025 at 01:00pm
In the cryptocurrency space, choosing a reliable trading platform is crucial. This article will introduce the latest rankings of the top ten exchanges in the currency circle in detail, and will explore the characteristics and advantages of each platform in depth. These rankings are selected based on many factors such as user experience, security, and tr...
Top 10 Virtual Currency Free Market Viewing Software Rankings of Top 10 Virtual Currency Exchanges in 2025
Apr 25,2025 at 09:21pm
In the cryptocurrency market, it is crucial to choose a reliable and powerful exchange app. This article will provide you with a detailed analysis of the top ten virtual currency exchange rankings in 2025 to help you better understand the top platforms in the market. Binance Binance is one of the world's leading cryptocurrency exchanges, known for i...
Top 10 Currency Circle Apps Summary of Top 10 Currency Apps in Currency Circle
Apr 26,2025 at 12:35pm
The following are the top ten currency apps in the currency circle: Binance : As the world's leading blockchain digital asset trading platform, Binance has users in more than 190 countries and regions around the world, with more than 140 million active users. The total assets of the platform reached US$16.59 billion, providing 1,463 trading pairs, a...
What are the top ten free market viewing software websites in the currency circle?
Apr 26,2025 at 04:36am
What are the top ten free market viewing software rankings in the currency circle? Which free market viewing software websites are worth recommending As the cryptocurrency market booms, investors' demand for real-time market data is growing. The free market viewing software website has become the preferred tool for many traders and investors. This a...
Top 10 digital currency exchange apps recommended by the currency circle virtual currency exchanges rank among the top ten
Apr 26,2025 at 12:57am
Recommended Top Ten Digital Currency Exchange Apps Top Ten Virtual Currency Exchanges In the currency circle, choosing the right market viewing software is crucial to monitoring market dynamics and making informed investment decisions. The following are the top ten free viewing software apps we have carefully selected to help you grasp market trends in ...
Bank cards support the top 10 digital currency exchanges (2025 ranking)
Apr 25,2025 at 05:08pm
Here is a list of some bank card information that supports digital currency exchanges: Binance: The Binance card is powered by Swipe, similar to a traditional debit card. The card supports 15 digital assets, including BTC, BNB, SXP and BUSD, and can be directly connected to funds in your Binance account. Cryptocurrencies stored on Binance cards are auto...
Top 10 digital currency exchange platforms recommend digital currency exchanges
Apr 26,2025 at 01:00pm
In the cryptocurrency space, choosing a reliable trading platform is crucial. This article will introduce the latest rankings of the top ten exchanges in the currency circle in detail, and will explore the characteristics and advantages of each platform in depth. These rankings are selected based on many factors such as user experience, security, and tr...
Top 10 Virtual Currency Free Market Viewing Software Rankings of Top 10 Virtual Currency Exchanges in 2025
Apr 25,2025 at 09:21pm
In the cryptocurrency market, it is crucial to choose a reliable and powerful exchange app. This article will provide you with a detailed analysis of the top ten virtual currency exchange rankings in 2025 to help you better understand the top platforms in the market. Binance Binance is one of the world's leading cryptocurrency exchanges, known for i...
Top 10 Currency Circle Apps Summary of Top 10 Currency Apps in Currency Circle
Apr 26,2025 at 12:35pm
The following are the top ten currency apps in the currency circle: Binance : As the world's leading blockchain digital asset trading platform, Binance has users in more than 190 countries and regions around the world, with more than 140 million active users. The total assets of the platform reached US$16.59 billion, providing 1,463 trading pairs, a...
What are the top ten free market viewing software websites in the currency circle?
Apr 26,2025 at 04:36am
What are the top ten free market viewing software rankings in the currency circle? Which free market viewing software websites are worth recommending As the cryptocurrency market booms, investors' demand for real-time market data is growing. The free market viewing software website has become the preferred tool for many traders and investors. This a...
Top 10 digital currency exchange apps recommended by the currency circle virtual currency exchanges rank among the top ten
Apr 26,2025 at 12:57am
Recommended Top Ten Digital Currency Exchange Apps Top Ten Virtual Currency Exchanges In the currency circle, choosing the right market viewing software is crucial to monitoring market dynamics and making informed investment decisions. The following are the top ten free viewing software apps we have carefully selected to help you grasp market trends in ...
Bank cards support the top 10 digital currency exchanges (2025 ranking)
Apr 25,2025 at 05:08pm
Here is a list of some bank card information that supports digital currency exchanges: Binance: The Binance card is powered by Swipe, similar to a traditional debit card. The card supports 15 digital assets, including BTC, BNB, SXP and BUSD, and can be directly connected to funds in your Binance account. Cryptocurrencies stored on Binance cards are auto...
See all articles
