Decentralized Finance (DeFi) has revolutionized the financial sector, and stablecoins play a pivotal role in this ecosystem. In 2025, understanding the function and types of stablecoins is essential for anyone venturing into DeFi.

Core Concepts:

• Definition: Stablecoins are digital currencies pegged to stable assets, providing a reliable medium of exchange in the DeFi space.
• Types: They can be fiat-collateralized, crypto-collateralized, or algorithmic, each with unique mechanisms to maintain stability.
• Use Cases: From lending and borrowing to yield farming, stablecoins facilitate various DeFi activities.

For a comprehensive understanding, refer to: What Is Stablecoin in DeFi? A Beginner’s Guide