Stablecoin Glossary
Crypto-Collateralized Stablecoin
A crypto-collateralized stablecoin is backed by cryptocurrency collateral locked in smart contracts.
Explanation
Users deposit crypto assets as collateral to mint stablecoins. Because the collateral may be volatile, these systems typically require overcollateralization.
Why it matters
Crypto-collateralized models allow decentralized issuance without reliance on centralized custodians.
Example
DAI is a well-known crypto-collateralized stablecoin.
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