A stablecoin is a type of cryptocurrency that is designed to maintain a stable market price. Recently, this type of digital currencies has grown in popularity, and we now have numerous stablecoin projects.
Although the exact mechanisms vary from one coin to another, stablecoins are supposed to be somewhat resistant to market volatility, so they should not experience significant price changes.
Many stablecoins have their values fixed by pegging them to the price of another asset. While most of them are pegged to the US dollar, there are stablecoins pegged to the price of other cryptocurrencies, or even commodities, like silver or gold. By being pegged to real-world assets, these coins avoid the wild price swings caused by the high levels of volatility, very common in cryptocurrency markets.
