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🥓 add some notes on stablecoins
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## 💰 Stablecoins
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## 💰 stablecoins
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<br>
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### Fiat-collateralized stablecoins
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### tl, dr
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<br>
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#### fiat-collateralized stablecoins
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* Fiat-collateralized stablecoins are stablecoins that are backed by fiat currencies like the US dollar.
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* Their reserves are held by a central entity. The most popular fiat-backed stablecoins at this time are USDC, USDT, and BUSD.
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* 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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<br>
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### Cryptocurrency-backed stablecoins
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#### cryptocurrency-backed stablecoins
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* This motivated the development of more decentralized, cryptocurrency-backed stablecoin.
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* The main player in this category today is MakerDAO’s Dai stablecoin.
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* While crypto-backed stablecoins are good for their decentralization, they are capital inefficient. '
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<br>
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### Decentralized (algorithmic) stablecoins
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#### decentralized (algorithmic) stablecoins
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* 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.
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* For this reason, developers set out to create non-collateralized (or algorithmic) stablecoins.
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* These coins maintain their peg without having to directly collateralize the issuance.
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* The two largest forces in the market in this category are Terra and Fei.
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<br>
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---
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### resources
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<br>
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* [high level intro from ethereum.org](https://ethereum.org/en/stablecoins/)
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