Stablecoins

Stablecoins are a type of cryptocurrency designed to maintain a stable value by pegging their worth to an underlying asset, typically a fiat currency like the US dollar or euro, or to a commodity like gold. Unlike traditional cryptocurrencies such as Bitcoin or Ethereum, which can experience significant price volatility, stablecoins aim to provide the benefits of digital currency while minimizing price fluctuations. This stability is achieved through various mechanisms, including backing the stablecoin with reserves or using algorithms to control its supply based on demand. Stablecoins are often used for transactions, remittances, and as a means to store value within the cryptocurrency ecosystem. They play a crucial role in decentralized finance (DeFi) applications by providing liquidity and facilitating trading on exchanges.