Stablecoin
A cryptocurrency pegged to a stable value (usually the US dollar) — DeFi's bridge between volatile crypto and steady purchasing power.
A stablecoin aims to keep a constant value, almost always $1.00. They’re tokens on a blockchain (USDT, USDC, DAI) used to trade, lend, and save without accepting Bitcoin’s price swings.
The three main types
Fiat-backed (USDT, USDC) hold real dollars in reserves. Crypto-backed (DAI) over-collateralize with other assets. Algorithmic stablecoins use supply mechanics without reserves — and several have collapsed trying, which is why reserves and transparency matter.
Why they matter
Stablecoins move enormous value on-block; their issuance also connects the crypto economy to the traditional dollar system. How much of a chain’s liquidity is stablecoin-based is visible in any on-chain data view.
Related terms
DeFi, Liquidity, Token, Exchange, Reserve