Stablecoins are a cornerstone of the crypto ecosystem, providing stability in a volatile market. However they come with risks that users must understand to avoid potential losses.
Q1: What is a common risk with fiat-backed stablecoins like USDT or USDC?
A1: Dependency on centralized custodians
Q2: What caused the TerraUSD collapse?
A2: A failure in its algorithmic stabilization system
Q3: What is one way to reduce risks when using stablecoins?
A3: Diversify across multiple stablecoins with transparent audits
