StablecoinsBeginner5 min
3 MAIN Types of Stablecoins Explained
By CoinGecko
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Video by CoinGecko · All rights reserved to original creator.
Summary
CoinGecko's concise breakdown of the three main stablecoin categories. Fiat-backed (USDC, USDT) hold real reserves. Crypto-backed (DAI) use smart contracts and over-collateralization. Algorithmic stablecoins use code to expand and contract supply. The video explains why each type behaves differently under market stress.
Key Concepts
Fiat-backedCrypto-backedAlgorithmicOver-collateralizationReserve ratioDe-pegging
Things To Remember
- Each stablecoin type has a different mechanism for maintaining its price peg.
- Fiat-backed stablecoins are simplest but require trusting the issuing company.
- Over-collateralization protects crypto-backed stablecoins from liquidation.
- Algorithmic stablecoins have collapsed before — they carry the highest risk.
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Attribution: This video was created by CoinGecko. All rights belong to the original creator. Crypto Education does not claim ownership of this content.