USDC (USD Coin)
A fully-reserved, fiat-backed stablecoin pegged 1:1 to the US dollar, issued by Circle and originally co-founded with Coinbase. Each USDC token is backed by US dollars held in segregated bank accounts and short-term US Treasuries, with reserves attested monthly by an independent accounting firm. USDC is one of the most trusted stablecoins in DeFi and is available on multiple blockchains.
“USDC is widely used in DeFi lending protocols, as a trading quote currency, and for cross-border payments. Holding USDC lets you stay in the crypto ecosystem while avoiding exposure to price volatility.”
Stablecoin
A cryptocurrency designed to maintain a stable value relative to a reference asset, typically the US dollar. Stablecoins provide a way to hold value and transact in crypto without exposure to price volatility. The three main types are: fiat-backed (USDC, USDT — backed by dollar reserves), crypto-backed (DAI — overcollateralized with crypto), and algorithmic (maintaining peg through algorithmic supply mechanisms).
USDT (Tether)
The largest stablecoin by market capitalization, pegged 1:1 to the US dollar and issued by Tether Limited. USDT is the most widely traded cryptocurrency by daily volume and the dominant quote currency on exchanges globally, particularly in Asia. Tether's reserves include US Treasuries, cash, and other investments, though its reserve composition has faced scrutiny and regulatory settlements.
DeFi (Decentralized Finance)
An ecosystem of financial services built on blockchain networks that operate without traditional intermediaries like banks, brokerages, or insurance companies. DeFi uses smart contracts to provide lending, borrowing, trading, insurance, derivatives, and yield generation in a permissionless, transparent, and composable manner. Anyone with a wallet can participate.
Fiat Currency
Government-issued currency that is not backed by a physical commodity like gold but rather by the trust and authority of the issuing government. Fiat currencies are the traditional monetary system that cryptocurrencies aim to complement or disrupt, and serve as the primary on-ramp and pricing reference for crypto markets.