-
Bitcoin $94,739.0758
0.34% - Ethereum
$1,815.1670
0.89% - Tether USDt
$1.0004
0.00% - XRP
$2.2803
0.16% - BNB
$609.9720
0.73% - Solana
$148.0063
-1.24% - USDC
$1.0000
0.00% - Dogecoin
$0.1796
-0.27% - Cardano
$0.7111
-0.57% - TRON
$0.2474
0.44% - Sui
$3.5387
-1.91% - Chainlink
$15.1719
2.10% - Avalanche
$22.1628
0.70% - Stellar
$0.2822
-2.35% - UNUS SED LEO
$8.9990
-0.01% - Toncoin
$3.2797
-0.72% - Shiba Inu
$0.0...01379
0.86% - Hedera
$0.1900
-3.44% - Bitcoin Cash
$373.0686
6.18% - Polkadot
$4.3169
3.46% - Litecoin
$86.7327
-0.04% - Hyperliquid
$18.6718
2.47% - Dai
$1.0002
0.01% - Bitget Token
$4.4293
2.75% - Monero
$270.1604
-15.02% - Ethena USDe
$0.9996
0.00% - Pi
$0.6038
-3.31% - Pepe
$0.0...08930
0.08% - Aptos
$5.5729
0.83% - Uniswap
$5.4817
-0.35%
What is Stable Coin? Understand Stable Coin in one minute
Stablecoins offer price stability in the volatile cryptocurrency market by being pegged to fiat currencies, acting as a bridge between traditional finance and digital assets.
Oct 21, 2024 at 09:06 pm
Understanding Stablecoins in 60 Seconds
1. Definition:
Stablecoins are cryptocurrencies pegged to the value of a fiat currency, such as the US dollar, Euro, or British pound.
2. Price Stability:
Unlike regular cryptocurrencies with volatile prices, stablecoins aim to maintain a stable value, typically 1:1 with their pegged fiat currency.
3. How it Works:
Stablecoins are typically backed by reserves of the underlying fiat currency or other highly stable assets like gold or Treasury bonds.
4. Types of Stablecoins:
- Fiat-backed: Fully backed by fiat currency reserves. (e.g., Tether)
- Over-collateralized: Backed by a basket of assets worth more than the value of the stablecoin. (e.g., MakerDAO's DAI)
- Algorithmic: Maintains stability through mathematical formulas and incentives. (e.g., TerraUSD)
5. Uses:
- As a store of value
- For payments and remittances
- As a trading pair for other cryptocurrencies
6. Advantages:
- Stable prices reduce volatility
- Easy integration with traditional financial systems
- Can bridge the gap between fiat and digital currencies
7. Challenges:
- Risk of de-pegging or market manipulation
- May face regulatory scrutiny and compliance issues
- Not immune to fluctuations in the underlying fiat currency value
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.
- 11 Altcoins with One-Time Token Unlocks Will Unlock More Than $5 Million Each in the Next 7 Days
- 2025-04-29 14:40:12
- The cryptocurrency market sustains a market-wide bullish outlook
- 2025-04-29 14:40:12
- The King of Pigs (KOPS) Enters the Memecoin Arena with a Historic Rally
- 2025-04-29 14:35:13
- Nexo is returning to the US market after a three-year absence
- 2025-04-29 14:35:13
- Bitget Burns 30 Million BGB Tokens Worth $130M to Reduce Supply
- 2025-04-29 14:30:12
- Arctic Pablo Coin (APC) Eyes $0.10 — One Of The Best Crypto Coins to Buy
- 2025-04-29 14:30:12
Related knowledge
What is a Merkle tree? What role does it play in blockchain?
Apr 29,2025 at 07:42am
A Merkle tree, also known as a hash tree, is a data structure used to efficiently verify the integrity and consistency of large sets of data. In the context of blockchain, Merkle trees play a crucial role in ensuring the security and efficiency of the network. This article will explore what a Merkle tree is, how it works, and its specific role in blockc...
What are PoW and PoS? How do they affect blockchain performance?
Apr 28,2025 at 09:21am
Introduction to PoW and PoSIn the world of cryptocurrencies, the terms Proof of Work (PoW) and Proof of Stake (PoS) are frequently mentioned due to their critical roles in securing and maintaining blockchain networks. Both mechanisms are used to validate transactions and add them to the blockchain, but they operate on different principles and have disti...
What is the Lightning Network? How does it solve Bitcoin's scalability problem?
Apr 27,2025 at 03:00pm
The Lightning Network is a second-layer solution built on top of the Bitcoin blockchain to enhance its scalability and transaction speed. It operates as an off-chain network of payment channels that allow users to conduct multiple transactions without the need to commit each transaction to the Bitcoin blockchain. This significantly reduces the load on t...
What is an oracle? What role does it play in blockchain?
Apr 29,2025 at 10:43am
An oracle in the context of blockchain technology refers to a service or mechanism that acts as a bridge between the blockchain and external data sources. It is essential because blockchains are inherently isolated systems that cannot access external data directly. By providing this connection, oracles enable smart contracts to execute based on real-wor...
What is zero-knowledge proof? How is it used in blockchain?
Apr 27,2025 at 01:14pm
Zero-knowledge proof (ZKP) is a cryptographic method that allows one party to prove to another that a given statement is true, without conveying any additional information apart from the fact that the statement is indeed true. This concept, which emerged from the field of theoretical computer science in the 1980s, has found significant applications in t...
What are tokens? What is the difference between tokens and cryptocurrencies?
Apr 29,2025 at 07:49am
Tokens and cryptocurrencies are both integral parts of the blockchain ecosystem, yet they serve different purposes and have distinct characteristics. In this article, we will explore the concept of tokens, delve into the differences between tokens and cryptocurrencies, and provide a comprehensive understanding of their roles within the crypto space. Wha...
What is a Merkle tree? What role does it play in blockchain?
Apr 29,2025 at 07:42am
A Merkle tree, also known as a hash tree, is a data structure used to efficiently verify the integrity and consistency of large sets of data. In the context of blockchain, Merkle trees play a crucial role in ensuring the security and efficiency of the network. This article will explore what a Merkle tree is, how it works, and its specific role in blockc...
What are PoW and PoS? How do they affect blockchain performance?
Apr 28,2025 at 09:21am
Introduction to PoW and PoSIn the world of cryptocurrencies, the terms Proof of Work (PoW) and Proof of Stake (PoS) are frequently mentioned due to their critical roles in securing and maintaining blockchain networks. Both mechanisms are used to validate transactions and add them to the blockchain, but they operate on different principles and have disti...
What is the Lightning Network? How does it solve Bitcoin's scalability problem?
Apr 27,2025 at 03:00pm
The Lightning Network is a second-layer solution built on top of the Bitcoin blockchain to enhance its scalability and transaction speed. It operates as an off-chain network of payment channels that allow users to conduct multiple transactions without the need to commit each transaction to the Bitcoin blockchain. This significantly reduces the load on t...
What is an oracle? What role does it play in blockchain?
Apr 29,2025 at 10:43am
An oracle in the context of blockchain technology refers to a service or mechanism that acts as a bridge between the blockchain and external data sources. It is essential because blockchains are inherently isolated systems that cannot access external data directly. By providing this connection, oracles enable smart contracts to execute based on real-wor...
What is zero-knowledge proof? How is it used in blockchain?
Apr 27,2025 at 01:14pm
Zero-knowledge proof (ZKP) is a cryptographic method that allows one party to prove to another that a given statement is true, without conveying any additional information apart from the fact that the statement is indeed true. This concept, which emerged from the field of theoretical computer science in the 1980s, has found significant applications in t...
What are tokens? What is the difference between tokens and cryptocurrencies?
Apr 29,2025 at 07:49am
Tokens and cryptocurrencies are both integral parts of the blockchain ecosystem, yet they serve different purposes and have distinct characteristics. In this article, we will explore the concept of tokens, delve into the differences between tokens and cryptocurrencies, and provide a comprehensive understanding of their roles within the crypto space. Wha...
See all articles
