Stablecoins is a type of crypto designed to maintain a stable market price. This type of digital asset has recently grown in popularity, and we now have numerous stablecoin projects.
Although the exact mechanisms vary from one coin to another, stablecoins are supposed to be somewhat resistant to market volatility, so they should not experience significant price changes.
Many stablecoins have their values fixed by pegging them to the price of another asset. While most of them are pegged to the US dollar, there are stablecoins pegged to the price of another crypto, or even commodities, like silver or gold. By being pegged to real-world assets, these coins avoid the wild price swings caused by the high levels of volatility prevalent in crypto markets.
Apart from minimized volatility, Stablecoins have several advantages like being open, global, and 24-hour accessibility to anyone with the internet. In addition, they are relatively fast, cheap, and secure to transmit. Being native to the internet, they are also programmable. For example, Stablecoins like USD Coin is pegged to the US Dollar. Dai is pegged to another crypto, and PAX Gold is pegged to precious metals like gold.
