Stablecoins, also referred to as pegged currency, are a type of token specifically designed to maintain a constant value that does not change with market fluctuations. To obtain immunity from the volatility of the crypto market, stablecoins must be systematically tethered to the value of an adequately stable asset. This stabilizing process is called collateralization, and can be done using fiat currency, other cryptos or through an algorithmic process.
As such, there are three types of stablecoins: fiat-collateralized stablecoins, crypto-collateralized stablecoins, and algorithmic stablecoins, Read more about these stablecoins, nd why this type of token is important to the crypto ecosystem, here.
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