A stablecoin is a form of cryptocurrency thats value is fixed by pegging it to the price of another asset. Stablecoins can be pegged to various kinds of assets, for example USD Coin (USDC), Paxos (PAX), and TrueUSD (TUSD) are tokens backed on a 1:1 ratio by money held in bank accounts. To issue these cryptocurrencies, the companies need to place the equivalent amount of FIAT currency such as USD into bank accounts. By pegging to real-word assets in this case the US dollar, these coins avoid the price volatility of cryptocurrency trading markets. Some stablecoins are pegged to other cryptocurrencies, referred to as crypto-collateralized stablecoins. The peg of these coins is maintained through over-collateralization and stability mechanisms. A prominent example is DAI, the stablecoin minted in the Maker DAO ecosystem.