Report post

What are algorithmic stablecoins?

Algorithmic stablecoins exemplify these traits; part monetary economics, part financial markets, part mathematics, and part technology. Sitting at the intersection of money and blockchain technology, they are new and complex—and pose many challenges and unanswered questions over how the future of DeFi will unfold.

What are stablecoins and how do they work?

Stablecoins are digital assets designed to hold a certain value relative to a different asset, most commonly the U.S. dollar. They have become a popular way to hedge against crypto price risk and move funds across exchanges throughout the world.

What are fractional-algorithmic stablecoins?

Fractional-algorithmic stablecoins are partly collateralized, meaning they are somewhat backed by a real-world asset. Frax is an example of a fractional-algorithmic stablecoin, as it is partially backed by USD Coin, a stablecoin that is backed by the U.S dollar. In some cases, algorithmic stablecoins can be very beneficial.

Can a stablecoin be collateralized?

However, stablecoins can also be collateralized on-chain using decentralized mechanisms, as is the case with DAI. Algorithmic stablecoins are different. Algorithmic stablecoins, in their purest form, are completely uncollateralized. Their value is not backed by any external asset.

Related articles

Canadian Authorities Initiate New Project to Combat Crypto Fraud

Canadian Authorities Initiate New Project to Combat Crypto Fraud2024-09-06 09:48:40The Alberta Securities Commission (ASC) has collaborate […]

Canadian Crypto Exchanges Faces Deadline For CIRO Membership

Canadian Crypto Exchanges Faces Deadline For CIRO Membership2024-08-06 23:33:50Canadian crypto exchanges face a looming deadline to comply with new regulations, specifically CIRO membership. With the crypto deadline approaching, exchanges are scrambling to adapt and ensure regulatory compliance. The question arises: are Canadian exchanges urgently pursuing regulatory compliance? This article explores the challenges and opportunities facing Canadian crypto exchanges as they navigate the changing regulatory landscape.

Best Ethereum ETFs In Canada For 2024

Best Ethereum ETFs In Canada For 20242024-08-01 02:52:21Discover the top Ethereum ETFs in Canada for 2024, including a comprehensive guide on what Ethereum ETFs are and how they work. Learn about the evolving investments in Ether ETFs like ETHR and CI Galaxy’s ETHX, as well as the purpose and benefits of investing in ETHH. Stay ahead of the curve with our curated list of top Ethereum ETFs for Canadian investors.

Canadian Tribunal Strikes Down Bitfarms’ Poison Pill Against Riot Platforms

Canadian Tribunal Strikes Down Bitfarms’ Poison Pill Against Riot Platforms2024-07-25 15:35:16On Wednesday, Bitcoin mining firm Riot Platforms announ […]

Solana ETFs Could Be Approved Without CME Futures: SOL Price Prediction

Solana ETFs Could Be Approved Without CME Futures: SOL Price Prediction2024-07-21 22:57:17Solana ETFs’ approval prospects and SOL price predictions are gaining momentum, with investors speculating on the potential impact of these funds on SOL’s growth. The outlook is being closely watched, especially during U.S. elections, as market sentiment could shift. While CME futures are not yet a necessity, the ETF approval may serve as a significant catalyst for SOL’s price movement. Stay tuned for updates on this developing trend.

The World's Leading Crypto Trading Platform

Get my welcome gifts