What Are Stablecoins?

A stablecoin cryptocurrency, or just stablecoin, is a non-native cryptocurrency or ERC-20 token inside a programmable or smart contracts blockchain that is pegged or associated to a national currency, such that 1 token equals 1 unit of the national currency.

These tokens or cryptocurrencies are called "stablecoins" because they are always worth 1 unit of the underlying national currency despite market conditions.

Examples of these stablecoins may be DAI, USDT, and USDC, which are all worth $1 because they are pegged to real US dollars deposited in a bank account or are guaranteed by other crypto assets to be worth $1 all the time.