The Four Types of Stablecoins: A Comparative Analysis
Stablecoins have gained significant popularity recently, with their market cap rising to over $180 billion. However, recent events have raised concerns about their stability. In this paper, we classify stablecoins into four types based on the source and management of collateral and investigat...
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| Format: | Article |
| Language: | English |
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University Library System, University of Pittsburgh
2024-12-01
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| Series: | Ledger |
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| Online Access: | http://ledger.pitt.edu/ojs/ledger/article/view/326 |
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| author | Matthias Hafner Marco Henriques Pereira Helmut Dietl Juan Beccuti |
| author_facet | Matthias Hafner Marco Henriques Pereira Helmut Dietl Juan Beccuti |
| author_sort | Matthias Hafner |
| collection | DOAJ |
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Stablecoins have gained significant popularity recently, with their market cap rising to over $180 billion. However, recent events have raised concerns about their stability. In this paper, we classify stablecoins into four types based on the source and management of collateral and investigate the stability of each type under different conditions. We highlight each type’s potential instabilities and underlying tradeoffs using agent-based simulations. The results emphasize the importance of carefully evaluating the origin of a stablecoin’s collateral and its collateral management mechanism to ensure stability and minimize risks. Enhanced understanding of stablecoins should be informative to regulators, policymakers, and investors alike.
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| format | Article |
| id | doaj-art-bebcc2a50a3f4fd99261d473db242eff |
| institution | OA Journals |
| issn | 2379-5980 |
| language | English |
| publishDate | 2024-12-01 |
| publisher | University Library System, University of Pittsburgh |
| record_format | Article |
| series | Ledger |
| spelling | doaj-art-bebcc2a50a3f4fd99261d473db242eff2025-08-20T02:38:49ZengUniversity Library System, University of PittsburghLedger2379-59802024-12-01910.5195/ledger.2024.326The Four Types of Stablecoins: A Comparative AnalysisMatthias Hafner0Marco Henriques Pereira1Helmut Dietl2Juan Beccuti3Cryptecon - Center for CryptoeconomicsUniversity of ZurichUniversity of ZurichInformal Systems Stablecoins have gained significant popularity recently, with their market cap rising to over $180 billion. However, recent events have raised concerns about their stability. In this paper, we classify stablecoins into four types based on the source and management of collateral and investigate the stability of each type under different conditions. We highlight each type’s potential instabilities and underlying tradeoffs using agent-based simulations. The results emphasize the importance of carefully evaluating the origin of a stablecoin’s collateral and its collateral management mechanism to ensure stability and minimize risks. Enhanced understanding of stablecoins should be informative to regulators, policymakers, and investors alike. http://ledger.pitt.edu/ojs/ledger/article/view/326Crypto CurrencyStablecoinEconomic simulation |
| spellingShingle | Matthias Hafner Marco Henriques Pereira Helmut Dietl Juan Beccuti The Four Types of Stablecoins: A Comparative Analysis Ledger Crypto Currency Stablecoin Economic simulation |
| title | The Four Types of Stablecoins: A Comparative Analysis |
| title_full | The Four Types of Stablecoins: A Comparative Analysis |
| title_fullStr | The Four Types of Stablecoins: A Comparative Analysis |
| title_full_unstemmed | The Four Types of Stablecoins: A Comparative Analysis |
| title_short | The Four Types of Stablecoins: A Comparative Analysis |
| title_sort | four types of stablecoins a comparative analysis |
| topic | Crypto Currency Stablecoin Economic simulation |
| url | http://ledger.pitt.edu/ojs/ledger/article/view/326 |
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