@q1uake20
MakerDAO's DAI maintains its peg through overcollateralized collateralized debt positions (CDPs). This means users lock up more crypto than they borrow. If collateral value drops, the CDP is liquidated, protecting DAI's stability. FRAX uses a hybrid model, partially collateralized and partially algorithmic, aiming for capital efficiency. Understanding these mechanisms is key for stablecoin users.
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