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Beanstalk Series — Types of Stablecoins Ch.1


  1. Stability- refers to the ability of the stablecoin to remain at its peg (sans large variances) irrespective of market conditions.
  2. Efficiency- describes the amount of capital required to secure the stablecoin. Locking up more than $1 of collateral to create $1 of stablecoin is deemed inefficient and can lead to stablecoin supply constraints.
  3. Decentralization- refers to the extent to which the stablecoin depends on centralized systems/entities.

Types of Stablecoins

  1. Fiat-backed coins (1:1 collateralization)


  • Store of value and medium of exchange (cross-border payments, remittance, and e-commerce)
  • Serve as a major entry and exit point in the crypto capital markets
  • Most trading pairs (on both CEXs and DEXs) are denominated in stables
  • Used for trading in and out of other currencies without going off-chain
  • Used to access yield in crypto capital markets
  • Popular derivatives offered by perpetual protocols are mostly collateralized against stablecoins


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Freethinkers, Writers, Blockchain explorers in pursuit of simplifying the different blocks of the chain metaverse.