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![mobymedia Avatar](https://lunarcrush.com/gi/w:24/cr:twitter::44687046.png) Moby Media [@mobymedia](/creator/twitter/mobymedia) on x 123.3K followers
Created: 2025-07-06 09:16:12 UTC

Been using stablecoins every day… but have you ever wondered how they actually work?🤔

Stablecoins are crypto assets pegged to stable values, like USD, gold, or even governed by algorithms.

1️⃣Fiat-backed: 1:1 reserves in a bank (USDC, USDT)
2️⃣Crypto-backed: overcollateralized with crypto (DAI)
3️⃣Algorithmic: supply & demand controlled by code (AMPL)
4️⃣Commodity-backed: tied to gold/oil (PAXG, XAUT)

So how do they stay stable?🧐

Reserves, smart contracts, and algorithms adjust supply to keep the price near the target (like $1). Some rely on off-chain banks, others on trustless smart contracts.

Stablecoins combine the stability of fiat with the speed, access, and flexibility of blockchain.🦾

What’s your favorite stablecoin?💭

![](https://pbs.twimg.com/media/GvKa2KrWoAAXBvW.jpg)

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**Related Topics**
[dai](/topic/dai)
[usdt](/topic/usdt)
[united states dollar](/topic/united-states-dollar)
[stablecoins](/topic/stablecoins)
[usdc](/topic/usdc)
[coins made in usa](/topic/coins-made-in-usa)
[coins bsc](/topic/coins-bsc)
[coins stablecoin](/topic/coins-stablecoin)

[Post Link](https://x.com/mobymedia/status/1941788258213498944)