Fiat-backed stablecoins
Issuers like Circle (USDC) and Tether (USDT) hold reserves of cash and short-term treasuries, redeem 1-for-1 with authorised counterparties, and publish attestations.
This is the most common and most straightforward design.
Crypto-collateralised
DAI and similar designs lock crypto (usually ETH) as collateral and mint stablecoins against it, over-collateralised to absorb volatility.
These are more decentralised but more capital-intensive.
Algorithmic designs
Purely algorithmic stablecoins attempt to hold their peg via supply-and-demand mechanisms. History shows they can unwind violently — the Terra/UST collapse being the most costly example.
Nexone generally lists conservative, reserve-backed designs.
Why use stablecoins?
Traders park capital in stablecoins between trades. Businesses settle cross-border payments in minutes at low cost. Individuals in high-inflation countries preserve purchasing power.
Stablecoins also unlock on-chain yield products via lending markets.
Risks
A stablecoin is only as strong as its reserves and its redemption path. Regulatory action, banking issues or reserve mismanagement can break the peg.
Diversify across issuers and read the Risk Disclosure before allocating significant capital.
Using stablecoins on Nexone
Trade any supported asset against USDC or USDT, deposit and withdraw on multiple networks, and use stablecoins as a base for Convert and Card products.