It depends, Algorithmic stablecoins should be virtually zero. There are other models like collateralized, partially etc
Yes but that was a failed model of stable token. UST has proven it. There was no reason to use it again rather than getting sued by so many people if your stable coin become zero like UST.
The stable token mechanism backed by the fiat currency was the best model in this case. It's more reliable compared with the algorithmic stable token model and it can sustain during the dump and defend its peg easily. BUSD, USDC. These stable tokens are reliable stable tokens.
Algorithmic stable token was a failed experiment.