Definition
A stablecoin targets a reference value, often one unit of a fiat currency, using a mechanism such as issuer reserves and redemption or onchain collateral.
Simple example
If direct redemption and liquid markets work, buying below the target and redeeming can help move the price back toward it.
Often confused with
The target is not a guarantee. Market price, redemption access, reserves, and contract risk can diverge.
Source
See something wrong? Brokzi logs material changes. Prepare a correction note.
