Stablecoins are cryptocurrencies whose value is pegged to another asset like the US dollar, euro, or gold. Their aim is to provide an alternative to the high volatility of others cryptocurrencies.
Stablecoins are types of tokens characterized by the non-volatility of their price. They are linked to the price of another asset (US dollar, euro, or gold) through pegging.
Their diffusion is due to the need to take shelter from crypto volatility in bearish periods without necessarily going through EUR or US dollar, becoming better-suited digital money to daily transactions.
They are digitally native ERC-20 tokens accessible to anyone and everywhere on the internet and exchangeable on DEX.
Stablecoins can be centralized or decentralized and divided into three micro categories: fiat-backed, currency-backed, and algorithmic or no-collateralized. They are USDT, USDC, USDP, BUSD, TUSD, DAI, and UST.
USDT is the most well-known stablecoin in circulation, the most capitalized stablecoin ever, and the third in market cap. Tether Ltd created it, and its value is pegged to the dollar for 1:1. Tether converts cash into digital currency to anchor or "peg" the currency's value to the price of national currencies such as the US dollar.
USDC is managed by Centre, the group which includes the company Circle and the exchange Coinbase. This stablecoin uses transparency and compliance with American laws and is fully open-source. It publishes monthly audits by independent law firms that verify the presence of the declared assets.