Fiat-Based Stablecoins
Fiat-based Stablecoins are the most popular type, whose values are tied to real currencies like USD. These Stablecoins are also known as off-chain assets, and Tether (USDT) is the popular Fiat-based Stablecoin.
Cryptocurrency Based Stablecoins
Crypto-based Stablecoins values are designed to be pegged to other cryptocurrencies. To buy or sell, lock your cryptos or Stablecoins into Smart contracts and receive Stablecoins or Cryptos of equal value. DAI is the most prominent Stablecoin.
Commodity Based Stablecoins
Commodity-based Stablecoins uses real-world assets as collateral, and their values are attached to commodities like gold, silver, or other precious metal, real estate, etc. Tether Gold (XUAT) is the prominent liquid gold-backed Stablecoins.
Algorithmic Stablecoins
Instead of using fiat or cryptocurrency as collateral, algorithmic Stablecoins use specialized algorithms and more advanced Smart contracts to manage the supply of created coins in circulation to stabilize the prices of Stablecoins.