Stablecoin

A cryptocurrency designed to maintain a stable value relative to a reference asset — almost always a fiat currency such as the US dollar. The three structural designs are fiat-backed (USDC, USDT — each token redeemable 1:1 against reserves held by the issuer), crypto-collateralized (DAI — minted against over-collateralized crypto deposits enforced by smart contracts), and algorithmic (the now-largely-defunct UST design — peg maintained by mint/burn mechanics against a sister token with no external reserve). Each design has different failure modes; conflating them is a common analytical mistake.