Stablecoin Risk Tier List

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Stablecoin Risk Tier List ranks stablecoins from lowest to highest risk depending on how they are collateralized, governed, and redeemed. It evaluates transparency, collateral quality, and historical behavior to help users judge reliability and stability across options.

Use Case: Useful for comparing safety levels across different stablecoins before using them for payments, savings, or liquidity.

Key Concepts:

Trust Assumptions — Confidence placed in issuers, custodians, or protocols.
Redemption Guarantees — How easily a stablecoin can be converted back to fiat.
Decentralization — Degree of governance distribution across the system.
Collateral Type — Nature of reserves (fiat, crypto, or algorithmic).

Stablecoin Risk Tiers

Tier	Stablecoin	Backing Model	Notes
Low Risk	$RLUSD	Short-term Treasuries	Regulated, enterprise-grade transparency
	$USDC	Cash + Treasuries	Audited, issued by Circle
	$PAX	Fiat-backed	NYDFS-regulated
Moderate Risk	$DAI	Crypto-collateralized	Market volatility exposure
Moderate Risk	$FRAX	Hybrid collateral	Partially algorithmic
High Risk	$USDT	Mixed reserves	Limited transparency, issuer concerns
High Risk	$UST (Terra)	Algorithmic	Collapsed in 2022

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