Stablecoin
Stablecoin is designed to maintain stable value by pegging to fiat currencies, commodities, or algorithms to minimize volatility.
What is Stablecoin?
A stablecoin is designed to maintain a stable value by pegging to assets like fiat currency (e.g., USD) or commodities(e.g., gold), to minimize volatility for payments, decentralized finance (DeFi), and cross-border transfers. Stablecoin types include fiat-backed (e.g., USDT and USDC, supported by reserves), crypto-backed (over-collateralized), and algorithmic.
In 2025, in the U.S., the GENIUS Act (Guiding Effective Non-Fiat Innovation and Utility for Stablecoins) was passed to establish a tailored regulatory framework for stablecoins. It emphasizing consumer protection, reserve transparency, and financial stability to foster innovation while mitigating risks like de-pegging.
Related Terms
Treasury Bills (T-Bills)
Short-term U.S. government debt securities with maturities from 4 to 52 weeks, sold at a discount and maturing at face value.
Overnight Reverse Repurchase Agreement Facility (ON RRP)
A Federal Reserve tool where eligible counterparties lend cash overnight to the Fed in exchange for Treasury securities as collateral, helping to set a floor on short-term rates.
Reputation System
A mechanism that rewards prediction market participants with non-financial incentives, like tokens, for accurate forecasts.
Liquidation (Perp Dex)
The forced closure of a leveraged position when margin falls below the required level.
Mainnet
The primary, public blockchain network where real-world transactions and digital assets are processed.
Price Oracle
A mechanism providing real-time price data for digital assets in DeFi protocols.