Stablecoin
token · defi
A cryptocurrency designed to maintain a stable value, typically pegged to a fiat currency like USD.
Stablecoins are tokens designed to track the value of another asset, most often a fiat currency such as the U.S. dollar. Designs include fiat-backed reserves, crypto-collateralized vaults, commodity backing, and algorithmic mechanisms.
Stable does not mean risk-free. Risks include reserve quality, redemption limits, depegs, smart contract bugs, frozen addresses, regulatory action, oracle failures, and liquidity shortages during stress.
Stablecoins are widely used for exchange settlement, DeFi collateral, remittances, payroll, and dollar-denominated accounting on-chain. Their usefulness depends on liquidity, redemption access, and confidence in the peg mechanism.
Related terms
Collateral
→Assets pledged to secure a crypto loan, margin position, or smart contract obligation until repayment.
finance · defi
Oracle
→A system that supplies on-chain smart contracts with trustworthy off-chain data.
smart-contracts · data
Over-the-counter (OTC)
→Trades conducted directly between parties rather than through a public order-book exchange.
trading
Liquidity
→How easily an asset can be bought or sold in size without causing a large price move.
finance · trading