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Stablecoin

Stablecoin

A type of cryptocurrency asset which is designed to have low volatility and therefore beneficial properties as a medium of exchange or a unit of account.

Stable coins are cryptocurrency assets have low volatility built into them and are useful as trusted a medium of exchange or store of value.

Types of stable coin

IOU

IOU stable coins are based on a centralized model of authority. The centralized authority is relied upon to be trustworthy and centrally controls an asset and issues stable coins that are redeemable for that asset.

Seigniorage Shares

Seigniorage Shares are a form of stable coins that algorithmically expand and reduce the supply of coins issued on the network to maintain a stable currency price. This form of stable coin is similar to how central banks maintain the stability of fiat currencies.

Collateralization

Stable coins that use collateralization use on-chain trustless issuance where assets are pledged by users to be used as collateral on the blockchain. Stable coins using collateralization are stabilized naturally through users using their knowledge overcollateralization, market efficiencies, complimentary incentives, profit motives, fallback procedures, and other market based information to maintain price stability.

Timeline

People

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Related Golden topics

Further reading

Title
Author
Link
Type

An overview of stablecoins

Myles Snider

Maker for dummies: a plain English explanation of the Dai stablecoin

Gregory DiPrisco

Stablecoins: A holy grail in digital currency

Nick Tomaino

The search for a stable cryptocurrency

Vitalik Buterin

Documentaries, videos and podcasts

Title
Date
Link

What are Stablecoins? (Tether, MakerDAO DAI, Basecoin/Basis, Saga)

May 13, 2018

What is a Stablecoin? Most Comprehensive Video Guide

May 25, 2018

Companies

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Products/Services

References