This is a chapter from the Token Economy book series. All subchapters are collapsed under their subchapter headings to make the page more readable. Find copyright information on this text and about the book an the end of the page.
<aside> 🦚 Stability of value is one of the most important functions of money so it can fulfill its purpose as a unit of account and a reliable store of value. However, Bitcoin and other protocol tokens traditionally don’t come with an inbuilt stability mechanism. Stable tokens have been explicitly designed for the purpose of bridging this gap. They represent a store of value, medium of exchange, and unit of account that has a stable value against another currency, commodity or index, and are expected to resolve a major bottleneck to mass adoption of tokens as a medium of exchange.
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Disclaimer: Many of the stable-token examples mentioned below are subject to frequent updates or current events. Certain details described in the following chapter might be out of date at the time of reading this book. This chapter has, therefore, been structured to paint a big picture of the complexities regarding the mechanism design of stable tokens, independent of the current developments of specific stable token projects.