A brief overview of different types of stablecoins
Quick Take
- Stablecoins need to have stabilization mechanisms that incentivize arbitrageurs to absorb price volatility when demand changes
- Different types of stablecoins focus on achieving two of three goals in the “stablecoin trilemma”
- Capital-efficient algorithmic stablecoins are on the rise, although they have yet to establish a proven record regarding stability
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Author: Eden Au
