What are stablecoins and why are they important?

Think of stablecoins as crypto’s answer to a safe harbour. They’re cryptocurrencies pegged to a stable asset - usually the US Dollar - so their value doesn’t swing wildly. They let traders hold value without cashing out, send money across borders quickly, and power DeFi platforms. On Delta Exchange, USDT is the primary settlement currency.

What are the 4 types of stablecoins?

There are four kinds: fiat-collateralised (like USDT and USDC, backed by cash or US Treasuries), crypto-collateralised (like DAI, backed by ETH), commodity-backed (like PAXG, tied to gold), and algorithmic stablecoins, which rely on supply-demand mechanics instead of collateral. That last category carries the most risk - something the TerraUSD collapse in 2022 made painfully clear.

What are the 5 biggest stablecoins?

As of 2025, the five largest by market cap are USDT (Tether), USDC (Circle), DAI (MakerDAO), FDUSD (First Digital USD), and PYUSD (PayPal USD).

Are stablecoins good for beginners?

They’re arguably one of the best entry points into crypto. Stablecoins let newcomers engage with crypto markets and DeFi without worrying about price swings. On Delta Exchange, holding USDT means you can trade futures and options without first buying BTC or ETH - a much gentler way to find your footing.

How are stablecoins used in DeFi?

Stablecoins are the quiet engine behind most of DeFi. They’re used to lend and borrow on platforms like Aave, provide liquidity in trading pools on Uniswap or Curve, and park value safely during turbulent markets. Because they don’t require a bank or intermediary, they make financial activity genuinely accessible to anyone with a wallet.

Delta Exchange Blog

Educational

Stablecoins: Why are they so important?

Shubham Goyal

September 15, 2021