To maintain stability, stablecoins employ various mechanisms such as collateralization, algorithmic adjustments, and reserve management. Collateralized stablecoins back each unit with assets like fiat currency or commodities, ensuring stability. Algorithmic stablecoins use smart contracts to adjust supply based on demand, maintaining stability. Reserve management involves transparently managing reserves to match circulating supply, crucial for stablecoin development.
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The Mechanics Behind Stablecoin Development
Posted - Mar 20 2024 : 02:18:39
