Stablecoin Glossary

Stablecoin

A cryptocurrency designed to hold a stable value relative to a reference asset — usually a fiat currency like the US dollar.

Peg

The target price a stablecoin is designed to hold — usually 1 unit of the reference asset per token.

Depeg

When a stablecoin's market price meaningfully diverges from its intended peg.

Collateral

The asset held to back a stablecoin's value and support redemption.

Peg Mechanism

The system by which a stablecoin maintains its peg — usually one of fiat-backed, crypto-backed, or algorithmic.

Fiat-Backed

A stablecoin backed by cash, bank deposits, and short-duration government debt held offchain by a custodian.

Crypto-Backed

A stablecoin backed by overcollateralized crypto deposits inside a smart contract, with liquidations to protect the peg.

Algorithmic Stablecoin

A stablecoin that holds its peg via supply-adjustment algorithms rather than 1:1 collateral.

Tokenized Treasuries

Onchain tokens backed 1:1 by short-duration US Treasury bills, often passing yield through to holders.

Delta-Neutral Stablecoin

A stablecoin that pairs a long crypto position with a short perpetual futures hedge to create synthetic dollars that earn funding-rate yield.

Circulating Supply

The total number of stablecoin tokens currently issued and in circulation across all chains.

Market Capitalization

For a stablecoin, market cap ≈ circulating supply × peg price ≈ circulating supply.

Reserves Attestation

A periodic report from an independent auditor confirming that a stablecoin's reserves match its outstanding supply.

Overcollateralization

Holding collateral worth more than the stablecoin outstanding — the standard design for crypto-backed stablecoins.

CDP (Collateralized Debt Position)

A smart-contract vault where a user locks collateral and mints stablecoin against it.

Rebase

A supply adjustment where token balances change directly rather than the token price moving.

RWA (Real-World Assets)

Traditional financial assets (bonds, credit, real estate) tokenized and brought onchain.

Yield-Bearing Stablecoin

A stablecoin that passes reserve yield through to holders.

Liquidation

Forced sale of collateral in a CDP when the position becomes undercollateralized.

Funding Rate

Periodic payment between long and short holders in a perpetual-futures contract — the yield source for delta-neutral stablecoins.