January 20, 2021, 7:00AM EST
• 9 min read

A brief overview of different types of stablecoins

Quick Take

  • Stablecoins need to have stabilization mechanisms that incentivize arbitrageurs to absorb price volatility when demand changes
  • Different types of stablecoins focus on achieving two of three goals in the “stablecoin trilemma”
  • Capital-efficient algorithmic stablecoins are on the rise, although they have yet to establish a proven record regarding stability

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