These stablecoins are backed by other cryptocurrencies held in smart contracts rather than by fiat reserves. To absorb price swings in the collateral, these systems are usually overcollateralized, meaning the value of locked assets exceeds the value of stablecoins issued.
Sky Protocol’s native stablecoin, USDS, is a well-known example: it maintains its dollar peg through collateral vaults and liquidation rules enforced on-chain, with a peg stability module that also supports 1:1 swaps between USDS and USDC.$BTC
Sky Protocol’s native stablecoin, USDS, is a well-known example: it maintains its dollar peg through collateral vaults and liquidation rules enforced on-chain, with a peg stability module that also supports 1:1 swaps between USDS and USDC.$BTC