Stablecoins explained
Digital dollars that live on blockchains — the connective tissue between crypto and the real economy.
> Three flavors
Fiat-backed (USDC, USDT) hold real dollars in a bank and issue tokens 1:1. Crypto-backed (DAI) lock crypto collateral in a smart contract and mint stablecoins against it. Algorithmic stablecoins try to hold the peg with market incentives alone — most historical attempts have failed.
> Why they matter
Stablecoins are how the vast majority of crypto trading actually happens, how remittances move faster than banks, and how DeFi protocols denominate loans and yields. They're arguably crypto's most consequential real-world product.
> What to watch
The quality of the reserves (are they actually cash, or commercial paper?), the transparency of attestations, and the legal jurisdiction of the issuer. A stablecoin is only as stable as the balance sheet or contract behind it.