What is a StableCoin?

A stablecoin is a type of cryptocurrency that’s designed to maintain a stable value, unlike Bitcoin or Ethereum, which can fluctuate a lot.

🥇 How it works:
 • Most stablecoins are “pegged” to a real-world asset, usually the U.S. dollar (USD), but some are pegged to other currencies, commodities (like gold), or even baskets of assets.
 • Example: 1 USDT (Tether) or 1 USDC (USD Coin) is meant to always equal $1 USD.

🥇 Types of stablecoins:
 1. Fiat-backed: Supported by real money held in banks (e.g., USDC, USDT).
 2. Crypto-backed: Backed by other cryptocurrencies, with smart contracts ensuring stability (e.g., DAI).
 3. Algorithmic: Use algorithms and market incentives to control supply and keep price stable (riskier).

🥇 Why people use them:
 • To avoid volatility in crypto markets.
 • For fast, cheap international transfers.
 • To trade or store value without going back to traditional bank accounts.