Understanding Stablecoins From An Economist’s Perspective

Stablecoins and the Law of Supply and Demand

How do stablecoins ensure stability?

Fiat-collateralization

Crypto-collateralization

Non-collateralized schemes (otherwise known as seigniorage shares)

  1. To create new coins when the demand is higher than the supply.
  2. To buy back coins from the market if the supply is higher than the demand.

Alternatives to stablecoins

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