What’s the deal with the different types of stablecoins, like fiat-backed, crypto-backed, and algorithmic?

[Manon]

Stablecoins come in a few flavors, each with its own twist. Fiat-backed stablecoins are tied to real-world currencies, like the US dollar, providing a sense of stability. On the other hand, crypto-backed ones use other cryptocurrencies as collateral, while algorithmic stablecoins rely on smart contracts to maintain their value without collateral.

 

[Aesthatic girl]

Crypto-backed and algorithmic stablecoins use other cryptocurrencies or algorithms to maintain value, but they often carry higher risks.