What are stablecoins?

As the name suggests, stablecoins are a type of cryptocurrency that has a stable value as they are pegged to a reserve of assets, which can be traditional assets like gold or silver or major cryptocurrencies like Bitcoin btc0.43%Bitcoin or Ethereum eth-1%Ethereum. 

At the time of writing, the stablecoins market cap in the crypto world has gone up from $83 billion last year to $173 billion in 2024. This indicates an increasing level of acceptance when it comes to stablecoins despite the stablecoin industry battling with problems of depegging and liquidity now and then.

Types of stablecoins

There are many stablecoins in the crypto market, but here we will list the top three types of stablecoins by market cap.

Tether (USDT)

Tether is a stablecoin that is directly pegged to the US dollar. It is currently the most popular stablecoin with the largest market capitalization, currently standing at 119 billion dollars.

USD Coin (USDC)

USDC survived a significant depegging in March 2023 and is still standing at a market capitalization of 35.57 billion dollars, making it the second-largest stablecoin in the crypto market.

Dai (DAI)

Dai is a stablecoin issued by the Maker Protocol. It is the third-largest stablecoin by market capitalization, currently standing at 5.87 billion dollars.