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.
According to coinmarketcap stablecoins do have a total supply remember that maximum supply is not the total supply. Looking at their marketcap it gradually increases over time in this case no one will be left out. We know that tether has the ability to create more usdt out of thin air they have a past history of doing so and I don't think that's going to stop anytime soon.
Honestly people are not interested in stable coins since we cannot make money with that.
Although people aren't interested in stablecoins like tether the daily trading volume remains to be high regardless.