What is Stablecoin?
A stablecoin is a token designed to hold a steady value, usually one US dollar. Backing may be cash reserves, other crypto assets, or an algorithm, and those models carry very different risks.
In practice
Reserve-backed stablecoins such as USDC and USDT depend on the issuer holding and reporting real assets. Crypto-collateralised designs over-collateralise to absorb volatility. Purely algorithmic models have failed repeatedly under stress. Stablecoins are how most Web3 payroll and grant funding actually moves.