Stablecoin Behavior Index
DeFi Strategies, Yield Models, Token Income
Stablecoin Behavior Index compares stablecoins based on how they maintain their peg to fiat (usually the U.S. dollar), their collateralization model, redeemability, and who controls their issuance. By analyzing these behaviors, users can better assess risk, transparency, and long-term trust in each asset.
Use Case: Helps users identify which stablecoins are fiat-backed, crypto-collateralized, or algorithmic, and whether they can be redeemed for dollars or are only usable in on-chain protocols.
Key Concepts:
- Fiat Peg ÔÇö The token’s value is tied to a government-issued currency like the USD.
- Overcollateralization ÔÇö Backing the stablecoin with more value than it represents.
- Algorithmic Peg ÔÇö Maintains price through mint/burn logic, not collateral.
- Redemption Rights ÔÇö Whether holders can exchange tokens for fiat or real-world assets.
- Issuer Control ÔÇö The central or decentralized entity managing the stablecoinÔÇÖs supply and backing.
Summary: The Stablecoin Behavior Index helps clarify how various stablecoins function under the hood. By comparing peg types, backing models, and issuers, users can choose stable assets aligned with their risk tolerance and use cases.
| Stablecoin | Peg Type | Backing | Redeemable? | Issuer | Notes |
|---|---|---|---|---|---|
| $RLUSD | Fiat Pegged | Fiat collateralized (Ripple Liquidity Hub) | Unknown | Ripple (via Liquidity Hub) | Still in early phases; not yet widely issued |
| $USD1 | Fiat Pegged | Fully backed 1:1 with USD | Yes | Currency One via Kinesis | Labeled as Currency One USD (USD1) in the Kinesis app; custodied and redeemable through verified accounts |
| $USDC | Fiat Pegged | 1:1 with USD reserves | Yes | Circle | Audited reserves held in U.S. banks |
| $USDT | Fiat Pegged | Mostly USD + mixed assets | Yes* | Tether Ltd. | *Redemption possible but centralized & controversial |
| $DAI | Crypto Pegged | Overcollateralized crypto (ETH, USDC, etc.) | No | MakerDAO (decentralized) | Backed by smart contracts and crypto collateral |
| $FRAX | Fractional Algorithmic | Partly collateral, partly algorithmic | Partially | Fraxlend DAO | Hybrid model that adjusts collateral dynamically |
| $UST (Terra) | Algorithmic | None (backed by burn/mint logic) | No | Terra Labs | Collapsed in 2022 due to peg failure |