@maximilino4n
How do algorithmic stablecoins work?
Algorithmic stablecoins adjust supply dynamically to maintain price stability.
Mechanism:
If price is above $1 → mint more tokens.
If price is below $1 → burn tokens or incentivize buying.
Examples (Failures & Successes):
UST (Terra) collapsed in 2022.
FRAX uses a hybrid model with better stability.
Algorithmic stablecoins are risky but explore innovative monetary policies.
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