Not All Stablecoins Are Stable: What Happened with Terra Luna

This video discusses the collapse of the Terra Luna stable coin as well as the two types of stable coins.

Outline
Intro 0:00 -
How Stable Coins DePeg 0:35 - 0:42
Backed Stable Coin 0:42 - 1:39
Algorithmic Stable Coin 1:39 - 2:30

A stablecoin is a digital currency that is pegged to a “stable” reserve asset like the U.S. dollar or gold. Stablecoins are designed to reduce volatility relative to unpegged cryptocurrencies like Bitcoin.
Stablecoins bridge the worlds of cryptocurrency and everyday fiat currency because their prices are pegged to a reserve asset like the U.S. dollar or gold. This dramatically reduces volatility compared to something like Bitcoin and results in a form of digital money that is better suited to everything from day-to-day commerce to making transfers between exchanges.
The combination of traditional-asset stability with digital-asset flexibility has proven to be a wildly popular idea. Billions of dollars in value have flowed into stablecoins like USD Coin (USDC) as they’ve become some of the most popular ways to store and trade value in the crypto ecosystem.

#terraluna #dokwon #stablecoin

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