What is Stablecoin?

A token engineered to hold a steady value, usually pegged to a currency like the US dollar, used as the low-volatility leg of DeFi.

How it works

Stablecoins let you hold on-chain value without price swings, and they're half of most trading pairs. But 'stable' depends on the peg mechanism and reserves — some have de-pegged under stress.

Example

In practiceYou hold a dollar stablecoin between trades so your portfolio value doesn't swing with the market.

Are stablecoins risk-free?

No. They carry de-peg risk and depend on the issuer's reserves and the smart contract. 'Stable' is a target, not a guarantee.

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