A stable coin is any cryptocurrency pegged to a stable asset, such as gold or fiat currencies. In theory, a stablecoin will remain constant in price, as it is a representation of a known amount of an asset.
My question is: Does a stable coin have a set total coin supply? Or does it have to be able to create and destroy based on the demand?
The image in my head goes like this:
A stable coin pegged to a currency started off its business saying it would have a coin supply of $5 billion. Everything works well until one day, the crypto market goes south and everyone rush to buy the stable coin. The coin is unable to sell to everyone because the demand for the coin is too high, so some people are left out.
Please correct me my misconception
Well its true that stable coins seems like a gateway to wait the market dip and then buy again. But i do think it doesnt matter and not affecting the price so much. Doesnt mean people would just leave and doesnt mean all people will follow to dump their coins. I believe there is a buyer and there is do a new people enter crypto everytime the price going down so i dont agree with your theory and its too hard to have a proof about that.My question is: Does a stable coin have a set total coin supply? Or does it have to be able to create and destroy based on the demand?
The image in my head goes like this:
A stable coin pegged to a currency started off its business saying it would have a coin supply of $5 billion. Everything works well until one day, the crypto market goes south and everyone rush to buy the stable coin. The coin is unable to sell to everyone because the demand for the coin is too high, so some people are left out.
Please correct me my misconception