StablecoinsBeginner5 min

3 MAIN Types of Stablecoins Explained

By CoinGecko

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Video by CoinGecko ยท 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 โ€” they carry the highest risk.

Attribution: This video was created by CoinGecko. All rights belong to the original creator. Crypto Education does not claim ownership of this content.