1. Fiat-backed.

These are the most well-known stablecoins. They maintain a 1:1 peg with fiat currencies, such as the Euro (EURC), US Dollar (USDC), or Mexican Peso (MXNB). They are generally backed at a 1:1 ratio. The USDC stablecoin, for example, keeps 1 US Dollar held in reserve for every USDC issued.

Commodity-backed.

A commodity-backed stablecoin is a type of digital currency whose value is tied to that of a tangible asset, such as gold or silver. Each stablecoin represents a specific amount of the physical commodity, which is securely stored by the issuer. Pax Gold (PAXG) is a cryptocurrency backed by gold. Each token represents one troy ounce of gold.

Crypto-backed.

These stablecoins are backed by other cryptocurrencies. This means that they use other cryptocurrencies as collateral, through smart contracts or automated smart contracts on the blockchain. This is the case of DAI, a crypto backed or collateralized with ETH and other tokens that operate on the Ethereum network through smart contracts designed to keep the value of DAI as close as possible to that of the USD.

Uncollateralized or algorithmic.

These stablecoins are not backed by assets, but rather maintain the stability of their value using algorithms and smart contracts to manage the supply of the stablecoin according to its demand. The main objective is to maintain a stable value, usually linked to some fiat currency such as the US dollar. An example of an algorithmic stablecoin is Magic Internet Money (MIM).

Mixed collateralization.

These types of stablecoins are backed by reserves of a combination of different assets such as fiat currency, cryptocurrencies and other types of assets or investments. Their goal is to maintain parity with stable assets, typically the USD, and they obtain their stability through the security provided.