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## 💰 stablecoins ## stablecoins
<br> <br>
<img width="758" alt="Screen Shot 2022-10-07 at 1 32 54 PM" src="https://user-images.githubusercontent.com/1130416/194648266-bb67eca3-dc70-4321-b9d6-25246b4156af.png">
<br>
### tl, dr ### tl, dr
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#### fiat-collateralized stablecoins #### fiat-collateralized stablecoins
* Fiat-collateralized stablecoins are stablecoins that are backed by fiat currencies like the US dollar. <br>
* fiat-collateralized stablecoins are stablecoins that are backed by fiat currencies like the US dollar.
* Their reserves are held by a central entity. The most popular fiat-backed stablecoins at this time are USDC, USDT, and BUSD.  * Their reserves are held by a central entity. The most popular fiat-backed stablecoins at this time are USDC, USDT, and BUSD. 
* The main weakness of fiat-collateralized stablecoin is centralization as the collateral of a fiat-collateralized stablecoin is held by one independent party. * The main weakness of fiat-collateralized stablecoin is centralization as the collateral of a fiat-collateralized stablecoin is held by one independent party.
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#### cryptocurrency-backed stablecoins #### cryptocurrency-backed stablecoins
<br>
* This motivated the development of more decentralized, cryptocurrency-backed stablecoin. * This motivated the development of more decentralized, cryptocurrency-backed stablecoin.
* The main player in this category today is MakerDAO’s Dai stablecoin. * The main player in this category today is MakerDAO’s Dai stablecoin.
* While crypto-backed stablecoins are good for their decentralization, they are capital inefficient. ' * While crypto-backed stablecoins are good for their decentralization, they are capital inefficient. '
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#### decentralized (algorithmic) stablecoins #### decentralized (algorithmic) stablecoins
<br>
* The average consumer or institutional investor would rather mint 1:1 through a centralized fiat stablecoin than have to over-collateralize by at least 150% to issue a decentralized stablecoin. * The average consumer or institutional investor would rather mint 1:1 through a centralized fiat stablecoin than have to over-collateralize by at least 150% to issue a decentralized stablecoin.
* For this reason, developers set out to create non-collateralized (or algorithmic) stablecoins. * For this reason, developers set out to create non-collateralized (or algorithmic) stablecoins.
* These coins maintain their peg without having to directly collateralize the issuance. * These coins maintain their peg without having to directly collateralize the issuance.
* The two largest forces in the market in this category are Terra and Fei. * The two largest forces in the market in this category are Terra and Fei.
<br>
---
### in this dir
<br>
* [curve](Curve.md)
* [dai](DAI.md)
* [(rip) ust](UST.md)
<br>
<br>
<img width="500" src="https://user-images.githubusercontent.com/1130416/194648266-bb67eca3-dc70-4321-b9d6-25246b4156af.png">
<br> <br>
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<br> <br>
* [high level intro from ethereum.org](https://ethereum.org/en/stablecoins/) * [stablecoins by the ef](https://ethereum.org/en/stablecoins/)