SoK: Demystifying Stablecoins
Communications of the ACM, Forthcoming
21 Pages Posted: 17 Oct 2019 Last revised: 6 Apr 2020
Date Written: February 15, 2019
This papers aims to provide an understandable survey of 'stablecoins'---cryptocurrencies designed to have lower volatility than Bitcoin or Ether. We distil the stability mechanisms into a set of primitives and precisely analyze why they are thought to adjust exchange rates, what assumptions they are based on, and what risks still exist. Stablecoins are interesting to the cryptocurrency community because volatility has hampered spending, increased speculation, and hindered mature lending/credit markets from forming. Our comparison includes pre-Bitcoin digital currencies like Liberty Reserve and e-gold, Ethereum's gas, and novel visualizations.
Keywords: stablecoins, bitcoin, blockchain
JEL Classification: E50
Suggested Citation: Suggested Citation