
Explainer: 'Stablecoins' in spotlight as Facebook unveils Libra cryptocurrency - hhs
https://www.reuters.com/article/us-crypto-currencies-explainer/explainer-stablecoins-in-the-spotlight-as-facebook-unveils-libra-cryptocurrency-idUSKCN1TJ1T6
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krisrm
I wish there were a bit more explanation provided on this paragraph:

> "Most are backed on a one-to-one basis by mainstream assets like the U.S.
> dollar, while others are collateralized by baskets of cryptocurrencies. Some
> use algorithms to maintain stable values."

Particularly the last two statements about "baskets of cryptocurrencies" and
algorithms. I've only got a basic understanding of how cryptocurrencies work,
does someone with a better understanding know what they're referring to here,
and how backing with other crypto currencies would prevent speculation from
massively inflating/deflating a so called "stable" cryptocurrency?

~~~
wmf
There are several projects exploring different algorithms for managing crypto-
collateralized stablecoins; they all involve fairly complex feedback loops.
MakerDAO aka Dai is the most prominent one and quite a bit has been written
about it.

[https://medium.com/makerdao/stablecoins-collateralization-
ty...](https://medium.com/makerdao/stablecoins-collateralization-
types-2a860624dcd3)

[https://medium.com/reserve-currency/our-analysis-of-the-
make...](https://medium.com/reserve-currency/our-analysis-of-the-makerdao-
protocol-4a9872c1a824)

[https://prestonbyrne.com/2018/01/11/epicaricacy/](https://prestonbyrne.com/2018/01/11/epicaricacy/)

[https://cointelegraph.com/news/dai-has-been-struggling-to-
ma...](https://cointelegraph.com/news/dai-has-been-struggling-to-maintain-
its-1-peg-but-the-makerdao-community-believes-it-will-soon-be-cryptos-default-
stablecoin)

