{"id":452659,"date":"2022-05-25T19:00:00","date_gmt":"2022-05-25T16:00:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/cryptopedia-learn-the-concepts-behind-stablecoins-and-how-they-work\/"},"modified":"2022-05-25T19:00:00","modified_gmt":"2022-05-25T16:00:00","slug":"cryptopedia-learn-the-concepts-behind-stablecoins-and-how-they-work","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/cryptopedia-learn-the-concepts-behind-stablecoins-and-how-they-work\/","title":{"rendered":"# Cryptopedia: Learn the concepts behind stablecoins and how they work"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a2554bf3caea\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a2554bf3caea\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/cryptopedia-learn-the-concepts-behind-stablecoins-and-how-they-work\/#%E2%80%9D_Cryptopedia_Learn_the_concepts_behind_stablecoins_and_how_they_work_%E2%80%9C\" >&#8221; Cryptopedia: Learn the concepts behind stablecoins and how they work  &#8220;<\/a><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9D_Cryptopedia_Learn_the_concepts_behind_stablecoins_and_how_they_work_%E2%80%9C\"><\/span>&#8221; Cryptopedia: Learn the concepts behind stablecoins and how they work  &#8220;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<p><img decoding=\"async\" src=\"https:\/\/images.cointelegraph.com\/images\/840_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjItMDUvNTI1NmJkM2ItYWJjZC00ZDZiLTkyYmUtOWFjNDgzOTJjZTZmLmpwZw==.jpg\" \/><\/p>\n<div class=\"post-content\" data-v-2a0745c6>Cointelegraph\u2019s director of video production Jackson DuMont dissected stablecoins in the latest episode of Cryptopedia. DuMont also explored and explained algorithmic stablecoins and the recent incident involving the TerraUSD (UST) and why it was unable to maintain its dollar peg.\u00a0<\/p>\n<p>DuMont defined stablecoins as \u201ca crypto whose value is tied to an outside asset such as the United States Dollar (USD).\u201d According to DuMont, stablecoins are very vital to the crypto industry as they provide users with the ability to store their assets without worrying about the depreciation of the assets\u2019 value. This function is useful in bear markets where there are a lot of uncertainties. <\/p>\n<p>Using Tether (USDT) as an example, DuMont noted that stablecoins are able to maintain their dollar pegs by having equal reserves. He explained that in order for Tether to create or mint any amount of USDT, the company should have an equal amount of USD in its reserves. <\/p>\n<p><iframe loading=\"lazy\" title=\"What are stablecoins, and how do they work?\" width=\"640\" height=\"360\" src=\"https:\/\/www.youtube.com\/embed\/fdPmjHtQ5aM?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe>The existence of this collateral allows USDT users the ability to exchange their USDT for USD whenever they want. This shows that stablecoins may only be \u201ccopies\u201d of the original currency. However, DuMont highlights one of the biggest differences \u2014 stablecoins exist on the blockchain. <\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>Cryptopedia: Learn about Web3 and how it aims to transform internet services<\/em><\/strong><\/p>\n<p>Apart from these, DuMont also discussed the topic of algorithmic stablecoins. The filmmaker explained that these stablecoins do not use any crypto or fiat money as their collateral. Instead, these projects use smart contracts and complex algorithms to manage the circulating supply and control the price. According to DuMont: <\/p>\n<blockquote><p>&#8220;When the price of the stablecoin deviates below its peg, tokens are burned from the circulating supply. Conversely, when the price goes above the peg, tokens are minted.&#8221; <\/p><\/blockquote>\n<p>In the case of Terra, DuMont explained that the system failed and \u201ccrashed the whole market.\u201d Several factors including Terra (LUNA) minting drove UST below its peg and snowballed into driving the price very far below its highs. <\/p>\n<p><template data-name=\"subscription_form\" data-type=\"markets_outlook\"><\/template><\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/cryptopedia-learn-the-concepts-behind-stablecoins-and-how-they-work\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8221; Cryptopedia: Learn the concepts behind stablecoins and how they work &#8220; Cointelegraph\u2019s director of video production Jackson DuMont dissected stablecoins in the latest episode of Cryptopedia. DuMont also explored and explained algorithmic stablecoins and the recent incident involving the TerraUSD (UST) and why it was unable to maintain its dollar peg.\u00a0 DuMont defined stablecoins&#8230;<\/p>\n","protected":false},"author":1,"featured_media":452660,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjItMDUvNTI1NmJkM2ItYWJjZC00ZDZiLTkyYmUtOWFjNDgzOTJjZTZmLmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74894,75493,122378,57111,70588,49],"class_list":["post-452659","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-blockchain","tag-stablecoin","tag-terra","tag-explained","tag-video","tag-youtube"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/452659","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=452659"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/452659\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/452660"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=452659"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=452659"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=452659"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}