Crypto-backed Stablecoin
A digital asset backed by other digital assets, often overcollateralized to ensure stability.
What is Crypto-backed Stablecoin?
Crypto-backed stablecoins, like Dai (DAI) issued by MakerDAO, are digital assets pegged to a fiat currency (e.g., USD) but backed by other digital assets, such as ETH, rather than fiat reserves. To counter the volatility of underlying assets, these stablecoins use overcollateralization, where the value of collateral exceeds the stablecoin’s pegged value. Managed by smart contracts, they offer decentralized stability, making them popular in DeFi for lending, borrowing, and liquidity provision, though they carry risks from collateral price fluctuations.
Related Terms
Australia Stablecoin Regulation
Australia's proposed licensing framework for digital asset platforms and stablecoin issuers under the Australian Financial Services license.
Liquidity Pool (DEX)
A liquidity pool is a smart contract on a decentralized exchange (DEX) that holds a pair of tokens, enabling automated trading and liquidity provision without traditional order books.
Core Personal Consumption Expenditures (Core PCE)
A variant of PCE excluding volatile food and energy prices to gauge underlying inflation trends, favored by the Fed for policy decisions.
BTC Yield
Strategy's key performance indicator measuring the percentage increase in Bitcoin holdings per diluted common share over a period.
Bitcoin Core
Bitcoin Core is the primary software client for running a Bitcoin full node, validating transactions, and contributing to the network’s proof-of-work consensus.
BTC Credit Hurdle (MSTR)
The BTC ARR% needed to achieve investment-grade BTC Credit under Strategy's framework.