Algorithmic Stablecoins

Stablecoins that are not backed by any collateral reserves but use algorithms to automatically adjust token supply based on demand. Instead, they use smart contract algorithms to automatically adjust token supply based on demand, aiming to maintain peg through controlled token issuance and burning.

What You Need To Know

Main features include decentralized stability with no reliance on central reserves and a dynamic mechanism adjusting to supply to match demand. The failure Terra Luna (UST) in 2022 was an example.