Glossary - ChicksX

Algorithmic Stablecoin is a cryptocurrency with value stabilized by algorithms, not backed by reserves.

Algorithmic Stablecoin is a type of cryptocurrency designed to maintain a stable value. Unlike traditional stablecoins backed by reserves like fiat currency or commodities, algorithmic stablecoins use algorithms and smart contracts to control supply and demand. These algorithms automatically adjust the supply of the stablecoin in response to price changes, ensuring its value remains stable. The goal is to achieve price stability through decentralized mechanisms, without relying on centralized entities or collateral. This innovative approach aims to offer the benefits of stable value while maintaining the decentralized nature of cryptocurrencies.