Crypto · Crypto specialist topics · lesson 3 of 9 · 7 min read · David Alexander
Stablecoin mechanics, in full
stablecoin mechanics
How the peg is actually held, per design: fiat-backed stablecoins holding reserves and redeeming one-for-one; crypto-collateralised ones over-collateralised on-chain; and algorithmic ones that tried to hold a peg with mechanism alone - and mostly failed, some catastrophically. The full mechanics module 4 deferred, so the reader can distinguish a peg backed by redeemable reserves from one backed by a promise and a feedback loop.
This lesson is part of the advanced modules.
Modules 6 to 8 are included with a paid account. The definitional summary above is the whole of this page until then.