Stablecoin Categories:

Asset Backed On-Chain:
Backed by cryptocurrencies such as Ether, it is dependent on the stability of the cryptocurrency on the other side of the equation.

Asset-Backed Off-Chain:
Backed by a “regular” fiat currency such as USD or euro, precious metals or other real-world assets. It requires trust in a opaque and centralised third party to hold the collateral.

Algorithmic:
Relies on a combination of algorithms and smart-contracts to maintain price equilibrium, it requires continual network growth and investment to provide capital and support a falling currency value.


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