| Type | Mechanism | Examples | Risks | |------|-----------|----------|-------| | | 1:1 reserves in bank accounts | USDC, USDT, BUSD | Counterparty, audit failure | | Crypto-backed | Overcollateralized crypto assets | DAI | Liquidation, volatility of collateral | | Algorithmic | Seigniorage / supply adjustments | (Historically: UST – failed) | High risk of death spiral |
Stablecoins are digital assets designed to maintain a stable value, often pegged to a fiat currency like the US dollar. security tokens and stablecoins quick start guide pdf
Security tokens are digital assets that represent ownership in a real-world asset. They are issued on a blockchain and are subject to regulatory oversight, making them a more secure and transparent way to invest in assets. | Type | Mechanism | Examples | Risks