In one sentence: What is a stablecoin?

Clarifies what stablecoins are, how pegs work, and how they differ from typical tokens.

{{{##anchor=preface}}} Preface In the previous chapter we talked about “why stablecoins emerged,” which was mostly about the broader backdrop of the era and the structural gap . This time, let’s narrow it down and answer one core question: What, exactly, is a stablecoin? And how is it different from an ordinary “coin,” or the wallet balance on your phone? For many people, the first encounter is seeing codes like “USDT, USDC, DAI” on an exchange, then being told: “Just treat them as dollars on-chain.” There’s some truth in that—but it’s also a very rough simplification. In this article, we’ll unpack that sentence properly. {{{##anchor=part-1.2}}} 1. One-sentence definition: What is a stablecoin? Here’s a definition that’s as non-cryptic as possible : **A stablecoin is a token that circulates on a blockchain and aims to keep its price stable, usually pegged to a fiat currency (like the US dollar) or other assets.** There are three keywords in that sentence: Circulates on a blockchain Aims for price stability Pegged to an asset Let’s break them down one by one. {{{##anchor=part-1.3}}} 2. “Circulating on a blockchain”: first and foremost, it’s an on-chain token From a technical standpo