Stablecoins and other tokens
According to Coinbase, “A stablecoin is a digital currency that is pegged to a “stable” reserve asset such as the US dollar or gold.” Given that unpegged cryptocurrencies such as Bitcoin or Ethereum are so volatile, stablecoins have become a reliable medium of exchange. The main stablecoins, according to their market cap at the time of writing, are listed in Figure 5.2:
Figure 5.2 – Crypto panic stablecoins ranking
Stablecoins are a specific category of tokens that are linked to the value of external assets, providing price stability. There are various types of stablecoins, including those whose value follows the value of a government-issued currency such as the US dollar (named fiat currencies), cryptocurrencies, and commodities such as gold. To maintain the “peg,” stablecoin teams have explored many paths. This can be seen in the “Mechanism” column in Figure 5...
