What are stablecoins, and how do they work

[BrianaRivas]

What are stablecoins, and how do they work

[CeciliaBerger]

Sure! Here are three different ways to explain stablecoins:

[AbigailMathis]

**Simple Explanation**: Stablecoins are a type of cryptocurrency designed to keep a stable value, usually pegged to a traditional currency like the US dollar. So, if you buy a stablecoin worth $1, it should always be worth about $1. They work by holding reserves of the currency they’re pegged to or using algorithms to maintain that value. This makes them less volatile compared to regular cryptocurrencies like Bitcoin.

[MariahMeza]

**Casual Take**: Think of stablecoins as the chill cousin of cryptocurrencies. While Bitcoin and others can go up and down like a rollercoaster, stablecoins are meant to stick close to a specific value, like the dollar. They do this by either backing each coin with real money in a bank or using some fancy tech to keep the price steady. So, if you want to dip your toes into crypto without the wild swings, stablecoins are a good way to go!