Stablecoins are a category of digital assets designed to maintain a consistent value by being linked to a pool of assets, frequently a designated amount of fiat currency such as the US dollar or a commodity like gold. This linkage is intended to counteract the significant volatility commonly seen with cryptocurrencies.

There are different types of stablecoins, backed by various reserves such as fiat-collateralized, crypto-collateralized, or algorithmic stablecoins. Some widely used stablecoins are USDT, USDC, and DAI.