# Stablecoins on the Market At present, stablecoins in the cryptocurrency domain can be categorized into three types: Fiat-Collateralized stablecoins, Cryptocurrency-Collateralized stablecoins, and Algorithmic stablecoins. The distinctions among them are based on the nature of the underlying assets, collateral ratios, stablecoin issuance methods, and price stability mechanisms.\ \ **1. Fiat-Collateralized stablecoins** Fiat-Collateralized stablecoins are stablecoins issued with fiat currencies (such as USD, EUR, etc.) as collateral, such as Tether (USDT), USD Coin (USDC), and TrueUSD (TUSD). These stablecoins are usually issued and managed by centralized institutions, and maintain a collateral ratio of 1:1 in general, which means that for every stablecoin issued, one unit of legal currency needs to be pledged as collateral.\ \ **2. Cryptocurrency-collateralized stablecoins** Cryptocurrency-Collateralized stablecoins are stablecoins issued with cryptocurrencies (such as Bitcoin, Ethereum, etc.) as collateral, such as Dai, BitUSD, and sUSD. The collateral ratio of these stablecoins is relatively low, usually 1:1.5 or 1:2, which means that to issue every one of a stablecoin, 1.5 or 2 cryptocurrencies need to be pledged as collateral.\ \ **3. Algorithmic stablecoins** Algorithmic stablecoins are stablecoins that use algorithms to maintain stablecoin prices, such as Basis Cash and Frax. The price maintenance mechanism of these stablecoins is relatively complex, usually introducing elastic supply mechanisms and incentive mechanisms to adjust supply and demand and maintain price stability. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://lybra-finance-1.gitbook.io/lybra-finance-docs/background/stablecoins-on-the-market.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.