What Is a Stablecoin?
A stablecoin is a type of cryptocurrency designed to maintain a steady value relative to a specific asset, most commonly the US Dollar.
Unlike volatile assets like Bitcoin, stablecoins aim for a 1:1 price peg, making them essential tools for global payments, savings, and trading without market surprises.
Stablecoins achieve stability through three primary mechanisms:
- Fiat-Collateralized: Backed 1:1 by real-world assets like cash and U.S. Treasuries (e.g., USDC, USDT). These are considered the safest due to transparent reserves.
- Crypto-Collateralized: Backed by other cryptocurrencies, often "over-collateralized" to absorb market swings (e.g., DAI).
- Algorithmic: Use smart contracts and market incentives to manage supply. These carry higher risk, as seen in the 2022 Terra (UST) collapse.
While designed for stability, they are not risk-free. Risks include depegging (losing the $1 value), reserve transparency issues, and smart contract vulnerabilities. For maximum security, users should prioritize reserve-backed coins with frequent third-party audits.
Stablecoins in KAST
KAST offers support for five different stablecoins:
- USDC
- USDT
- USDe (for advanced users)
- PYUSD
- RLUSD
Sending Stablecoins to KAST
When depositing stablecoins like USDC or USDT to KAST, it’s important to select the correct blockchain network. Many stablecoins exist on multiple networks, and sending funds on an unsupported network can result in delays or loss of funds.
Before transferring:
- Confirm the stablecoin type is supported.
- Double-check that the blockchain network selected in your wallet matches one supported by KAST.
- Verify the deposit address carefully before sending.
Choosing the correct network ensures fast confirmations, lower fees, and smooth card top-ups. Stablecoins are built for predictable value, and using the right network keeps that experience seamless from deposit to spending.
With the KAST Earn feature, you can earn flexible yield provided by Gauntlet by putting your USD to work.
