Stablecoins act as a safe haven and trading medium in the crypto market, and their core mechanisms include three types: fiat currency collateral, crypto asset collateral and algorithmic adjustment. Fiat currency collateralized stablecoins support currency values ??through 1:1 reserve fiat currency, such as USDT and USDC; crypto-asset collateralized stablecoins adopt over-collateralized strategies, such as DAI; algorithmic stablecoins rely on smart contracts to adjust supply to maintain price stability, but have higher risks. Mainstream stablecoins such as USDT, USDC, DAI, BUSD and TUSD are widely used in major exchanges to provide compliance and liquidity guarantees.

In a market where cryptocurrencies such as Bitcoin fluctuate sharply, stablecoins provide a relatively constant digital asset that acts as a safe haven and a medium of trading. The core reason why they can maintain price stability is that they have a unique value anchoring and collateral mechanism behind them, allowing them to maintain an approximately 1:1 exchange rate with fiat currencies (such as the US dollar).

Stablecoin Exchange in 2025:

Ouyi okx :

Binance binance:

Huobi htx:

The core mechanism of stablecoins: anchoring and mortgage

Stable coins are not produced out of thin air, and their price stability mainly relies on the following three mainstream issuance mechanisms. It is these mechanisms that allow them to survive the huge fluctuations in the crypto market.

Fiat currency collateralized stablecoin

This is the most common and easy to understand. Its operating model is very direct: for every stablecoin issued by the issuer, the fiat currency assets of equivalent value (such as US dollars or euros) will be deposited in its reserve account. In theory, behind every stablecoin in circulation is real legal currency assets as support. Users can exchange stablecoins back to fiat currency at a ratio of 1:1 at any time. This model is highly transparent and stable, but it depends on the credit and audit of centralized institutions.

Crypto Asset Pledge Stable Coins

These stablecoins use other cryptocurrencies (such as Ethereum) as collateral. In order to cope with the risk of fluctuations in the price of the collateral itself, it adopts a "over-collateralization" strategy. For example, users need to stake $200 worth of Ethereum to mint a $100 stablecoin. When the collateral value falls to a certain level, the system will force liquidation to ensure that the value of the stablecoin is still supported by sufficient asset.

Algorithm stablecoin

Algorithmic stablecoins do not rely on any asset collateral, but automatically adjust the supply in the market through a complex set of algorithms and smart contracts, thereby maintaining their price pegged to the target fiat currency. When the price of a stablecoin is higher than USD, the algorithm issues additional tokens to lower the price; when the price is lower than USD, the supply will be reduced to increase the price. This model is highly decentralized, but it is complex in design. There have been cases of price deanstation or even collapse due to mechanism failure in history, and the risks are relatively high.

Mainstream stablecoins inventory

After understanding the basic principles, let’s take a look at the most mainstream stablecoins on the market, which are widely used on major exchanges such as Binance and OKX.

1. USDT (Tether)

As the pioneer of the stablecoin market and the stablecoin with the largest market value at present, USDT adopts the fiat currency collateral model. It has the widest application scenarios and the best liquidity, and is standard on almost all cryptocurrency exchanges. It has a large number of trading pairs on platforms such as Binance, OKX, Huobi and Gate.io.

2. USDC (USD Coin)

USDC is also a fiat-collateralized stablecoin, jointly launched by well-known companies Circle and Coinbase. It is known for its strict compliance and high transparency, and regularly publishes reserve reports audited by third-party accounting firms. Therefore, it is considered one of the most compliant and safest stablecoins on the market and is highly favored by institutional investors.

3. DAI

DAI is a typical crypto-asset collateralized stablecoin managed by the decentralized autonomous organization MakerDAO. It operates completely on the Ethereum blockchain, achieves over-collateralization and price stability through smart contracts, and is one of the core assets in the decentralized finance (DeFi) ecosystem.

4. BUSD (Binance USD)

BUSD is a fiat-solid stablecoin issued by Binance in partnership with Paxos, and is approved and regulated by the New York State Department of Financial Services (NYDFS). Its reserves are strictly audited and have high transparency. Although the new issuance has been stopped due to regulatory reasons, it is still circulated in the existing market.

5. TUSD (TrueUSD)

TUSD is another regulated fiat-staking stablecoin that innovatively adopts on-chain real-time proof technology, allowing users to independently verify their dollar reserves at any time, providing extremely high transparency. Trading volume on exchanges such as Binance has increased significantly recently.

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