@evelyndg
Algorithmic and collateralized decentralized stablecoins face inherent challenges. Over-collateralized models are capital inefficient, while algorithmic designs risk collapse under stress. Inherently unstable may be too strong—but decentralized stablecoins walk a tightrope between resilience and fragility. Success depends on diversified collateral, robust peg mechanisms, and market confidence. While centralized stablecoins dominate, decentralized ones remain critical for censorship resistance. Their instability is not inevitable but demands constant design trade-offs and community trust.
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