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Home web3.0 What is a stablecoin? Introduction to 10 mainstream stability ratios. Understand the coin circle in one article

What is a stablecoin? Introduction to 10 mainstream stability ratios. Understand the coin circle in one article

Jul 07, 2025 pm 08:06 PM
Blockchain tool ai binance cryptocurrency Ethereum Blockchain technology Stablecoin Stablecoin trading What is a stablecoin Introduction to 10 mainstream stability ratios

Stablecoins are crypto assets with relatively stable value. The core function is to provide a digital asset that anchors the value of traditional assets, which facilitates transactions, storage and investment in the crypto world. It is mainly divided into three categories: 1. Centralized collateralized stablecoins, such as Tether (USDT), USD Coin (USDC); 2. Crypto Asset Collateralized Stablecoins, such as Dai (DAI); 3. Algorithmic stablecoins, such as Frax Share (FRAX). Mainstream stablecoins also include Binance USD (BUSD), TrueUSD (TUSD), Paxos Standard (USDP), Gemini Dollar (GUSD), Liquidity USD (LUSD), and USDD (USDD). When choosing, you should pay attention to the issuer’s background, reserve transparency and audit reports to ensure security.

1. What is a stablecoin?

Stablecoins are special cryptocurrencies whose value is designed to remain stable. This stability is usually achieved by pegging to a fiat currency (such as the US dollar), commodities (such as gold), or a basket of assets. This means that the issuer will hold reserve assets of equivalent value to support the value of the stablecoin. For example, if a stablecoin is pegged to the US dollar 1:1, then for every stablecoin issued, its issuer should hold a reserve of US$1. The purpose of this is to solve the huge fluctuations in the price of ordinary cryptocurrencies and provide users with a stable tool for trading and storing value on the blockchain. You can think of stablecoins as the "digital dollar" or "digital gold" in the crypto world, which not only retains the advantages of blockchain technology, but also circumvents price uncertainty.

2. Official website address of mainstream stablecoin exchange

  • Binance Binance: ()
  • Ouyi OKX: ()
  • Huobi: ()
  • Gate.io Sesame Opening: ( )

What is a stablecoin? Introduction to 10 mainstream stability ratios. Understand the currency circle in one article - php Chinese

3. What are the categories of stablecoins?

Stable coins are mainly divided into the following categories:

  • Centralized collateralized stablecoins: This is the most common type, collateralized by fiat currency, commodities or other financial assets, issued and managed by centralized institutions. The issuer will regularly publish its reserve audit reports to prove its transparency and solvency. Representatives include Tether (USDT), USD Coin (USDC).

  • Crypto Asset-Cleared Stablecoins: This type of stablecoins is issued by over-collateralized by other crypto assets (such as Ethereum). Because crypto assets as collateral are volatile themselves, over-collateral is often required to cope with the risk of price declines. It means Dai (DAI).

  • Algorithmic stablecoins: This type of stablecoins does not rely on external asset collateral, but maintains price stability through algorithms. When the price deviates from the anchor target, the supply is automatically adjusted through smart contracts. However, these stablecoins are at higher risk, and some projects have experienced decoupling events.

What is a stablecoin? Introduction to 10 mainstream stability ratios. Understand the currency circle in one article - php Chinese

4. Introduction to 10 mainstream stablecoins

Understanding mainstream stablecoins helps you better operate in the digital asset space.

  1. Tether (USDT): One of the most market-owned stablecoins, mainly anchored to the US dollar, is issued by Tether Limited. You can find its traces on major exchanges, such as Binance and Coinbase.

  2. USD Coin (USDC): issued by Circle and Coinbase, which also anchors the dollar and is known for its compliance and transparency. It is widely used in many DeFi applications.

  3. Binance USD (BUSD): The stablecoin issued by Binance (https://www.binance.com/) and Paxos Trust Company, anchored to the US dollar, is regulated by the New York State Department of Financial Services (NYDFS).

  4. Dai (DAI): Issued by the MakerDAO project, it is a decentralized crypto asset-solidated stablecoin, which mainly maintains its peg with the US dollar by over-solidating crypto assets such as Ethereum.

  5. TrueUSD (TUSD): Issued by TrustToken, it claims to be the first US dollar-collateralized stablecoin to be audited daily by an independent third-party agency.

  6. Paxos Standard (USDP): Issued by Paxos Trust Company, anchored to the US dollar, is also regulated by the New York State Department of Financial Services and is often used for inter-agency transactions.

  7. Gemini Dollar (GUSD): Issued by Gemini (https://www.gemini.com/) Exchange, anchored to the US dollar, and is also regulated by the New York State Department of Financial Services.

  8. Frax Share (FRAX): A hybrid algorithmic stablecoin, supported in part by collateral and partially adjusting supply through algorithms.

  9. Liquidity USD (LUSD): Issued by the Liquity protocol, it is a license-free decentralized stablecoin based on Ethereum and is oversized by ETH.

  10. USDD (USDD): An algorithmic stablecoin in the Tron (https://tron.network/) ecosystem.

When choosing a stablecoin, it is recommended to pay attention to the background of its issuer, reserve transparency, and audit reports to ensure asset security.

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