Primer: Becoming An Algorithmic Stablecoin Maxi [Report]

There are three main types of stablecoins:

• Fiat-backed stablecoins (or “fiat-collateralized” stablecoins): backed by fiat collateral, often a reserve or liquid collateral.
• Over-collateralized stablecoins (or “anchored” stablecoins): often backed by a basket of currencies, which may or may not include other stablecoins or cryptocurrencies.
• Algorithmic stablecoins (or “reflexive” stablecoins): governed by algorithm (or algorithms) which adjusts the token’s supply based on demand; may or may not be supported by any type of collateral.

This primer focuses on algorithmic stablecoins. We will provide an overview of the biggest stablecoins, discuss their defining moments, and closely examine what happens when tokens depeg.

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