• Dapps:16.23K
  • Blockchains:78
  • Active users:66.47M
  • 30d volume:$303.26B
  • 30d transactions:$879.24M
What Are Stablecoins? Understanding Their Role and Value in Crypto

What Are Stablecoins? Understanding Their Role and Value in Crypto

user avatar

by Alexandra Smirnova

2 years ago


Stablecoins are cryptocurrencies that are designed to maintain a stable value relative to a particular asset, such as the US dollar or gold. This stability is achieved through various mechanisms, such as backing the stablecoin with a reserve of the underlying asset, or using algorithms to control the supply and demand of the stablecoin.

The most common stablecoins

Here are some of the most popular stablecoins, ranked by market capitalization as of March 2023:

  1. Tether (USDT): Tether is the most popular stablecoin, with a market capitalization of over $40 billion. It is backed 1:1 by US dollars held in reserve, and is widely used in cryptocurrency trading as a way to move funds between exchanges without the need for fiat currency.
  2. USD Coin (USDC): USD Coin is a stablecoin backed by a reserve of US dollars, and has a market capitalization of over $10 billion. It was launched by Circle and Coinbase, and is used by a wide range of cryptocurrency exchanges and services.
  3. Binance USD (BUSD): Binance USD is a stablecoin launched by the Binance cryptocurrency exchange and Paxos, and is backed 1:1 by US dollars held in reserve. It has a market capitalization of over $7 billion.
  4. Dai (DAI): Dai is a decentralized stablecoin that is not backed by a reserve, but instead uses a system of collateralized debt positions (CDPs) to maintain its value. It has a market capitalization of over $4 billion.
  5. TrueUSD (TUSD): TrueUSD is a stablecoin backed 1:1 by US dollars held in escrow accounts, and has a market capitalization of over $2 billion. It is often used in cryptocurrency trading and is also available on several decentralized exchanges.

Other popular stablecoins include Paxos Standard (PAX), Gemini Dollar (GUSD), and HUSD.

Centralized stablecoins are backed by a reserve of assets held by a centralized entity, such as a bank or financial institution. These entities can control the supply of the stablecoin and maintain its peg to the underlying asset, typically a fiat currency like the US dollar. 

Decentralized stablecoins, on the other hand, are not backed by any central authority and instead rely on smart contracts or algorithms to maintain their stability. Crypto-collateralized decentralized stablecoins are backed by other cryptocurrencies, while algorithmic decentralized stablecoins use complex algorithms to adjust their supply in response to market demand.

0

Share

Other articles

Legends of Elysium is an innovative symbiosis of a card game and a board strategy

Legends of Elysium is a combination of a card game, strategy and blockchain, where every decision affects the outcome of the battle. The NFT and terraforming game was released in March 2025 and quickly gained the interest of players.

user avatarMax Nevskyi

9 hours ago

The Mistwood: Diving into Magic and Building directly on Telegram

The Mistwood is a unique Telegram game combining farming, adventure and construction. Thanks to its isometric graphics and deep mechanics, it attracts both beginners and experienced players.

user avatarMax Nevskyi

18 hours ago

What Is ClubGG — A Blockchain-Based Poker Platform with WSOP Qualifiers and Club Play

Discover how ClubGG blends blockchain with poker through subscriptions, tournaments, and WSOP qualifiers. Full breakdown of features, clubs, and security measures.

user avatarElena Ryabokon

18 hours ago

Franky's Dinner: A Web3 Arcade Adventure with NFT Frogs and On-Chain Economy

Franky's Dinner is a Web3 arcade game featuring NFT frogs, a humorous escape story, and on-chain asset ownership. Run, collect apples, and be part of a blockchain-powered world.

user avatarElena Ryabokon

a day ago

Tabi — A Modular Blockchain Platform for Web3 Gaming and Developers

Discover how Tabi Chain is revolutionizing Web3 gaming with modular architecture, Proof of Attention rewards, and a developer-friendly ecosystem.

user avatarElena Ryabokon

a day ago

The Blockchain Group: European Leader in Bitcoin Treasury and AI Blockchain Innovation

An in-depth look at The Blockchain Group — the first European company focused on Bitcoin Treasury strategy, AI development, and decentralized technologies. Includes analysis of its business model, investments, and tech evolution.

user avatarAlexandra Smirnova

a day ago

dapp expert logo
© 2020-2025. DappExpert. All rights reserved.
© 2020-2025. DappExpert. All rights reserved.

Important disclaimer: The information presented on the Dapp.Expert portal is intended solely for informational purposes and does not constitute an investment recommendation or a guide to action in the field of cryptocurrencies. The Dapp.Expert team is not responsible for any potential losses or missed profits associated with the use of materials published on the site. Before making investment decisions in cryptocurrencies, we recommend consulting a qualified financial advisor.