What is Stablecoins and how many and how they work?
The way Stablecoins achieves by collateralizing other real-world assets and pairing the value to them. As such,the value of stablecoins should never exceed the collateral in reserve, and therefore can(in most cases)be exchanged to the assets they’re pegged to at any time.
It's important to know that staple coins or non-mined ones and non pre-mined Instead, their total supply is always changing and reacting to the movements in the market. In order to control inflation, coins are burned when exchanged to the pegged asset. Likewise, when an asset is collateralized, newly created stablecoins enter the market.
Several different types of stablecoins currently exist. Even though the underlying principle is the same, the main difference is how a particular stablecoin maintains its value.
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ravinayag
What is Stablecoins and how many and how they work?
The way Stablecoins achieves by collateralizing other real-world assets and pairing the value to them. As such, the value of stablecoins should never exceed the collateral in reserve, and therefore can (in most cases) be exchanged to the assets they’re pegged to at any time.
It's important to know that staple coins or non-mined ones and non pre-mined Instead, their total supply is always changing and reacting to the movements in the market. In order to control inflation, coins are burned when exchanged to the pegged asset. Likewise, when an asset is collateralized, newly created stablecoins enter the market.
Several different types of stablecoins currently exist. Even though the underlying principle is the same, the main difference is how a particular stablecoin maintains its value.
1, FIAT- backed Stable Coins , ex : USD $$
2, Commodity backed Stable coins , ex : GOLD
3, Cryptocurrency-backed stable coins, ex: bitcoin/eththerium
4, Seigniorage/Algo backed Stable coins , ex, : no proven example.
Ref : https://blog.knowledgesociety.tech/what-is-stablecoins-and-how-do-they-work/