What Are Decentralized Stablecoins?

Krutika Adani


Decentralized stablecoins are those cryptocurrencies that are issued by community-owned projects such as a DAO and which do not have any single controlling entity.


MakerDAO’s DAI is an example of such a decentralized stablecoin.


Since they are issued by decentralized organizations, their control is more democratic. Also, these coins are more privacy-focused than their centralized counterparts.


Sometimes the community whims may force ill-informed decisions on such projects.

Types of Decentralized Stablecoins

Notably there are four major types, namely, overcollateralized, algorithmic, non-pegged, and fractional stablecoins.