The Three Generations of Stablecoins and How They Work
There are currently three different generations of stablecoins as a result of numerous improvements to the technology. Let’s explore them and the future of stablecoin technology.
The first generation is the earliest stablecoins and generally what people think of the technology. These stablecoins are asset-backed by fiat money, commodities, or other digital assets. They are usually pegged to their asset on a one-to-one basis, but this can differ from coin to coin. Generation one stablecoins are transparent and regulated by some governing body. This makes them safe to use and easy to redeem for users.