Crypto-collateralised stablecoin
crypto-backed stablecoin
A stablecoin backed by on-chain crypto collateral, typically over-collateralised, with liquidation rules enforced by the protocol.
Examples: DAI (mixed RWA + crypto), LUSD, crvUSD, GHO. Capital-inefficient relative to fiat-backed but inherits censorship-resistance from the underlying chain. Risk profile is dominated by collateral-asset volatility, oracle reliability, and liquidation-mechanism design.
Related terms
- Fiat-collateralised stablecoinA stablecoin backed by off-chain fiat reserves (cash + equivalents) held by a regulated custodian.
- Algorithmic stablecoinA stablecoin that maintains its peg through programmatic supply expansions and contractions rather than 1:1 reserves.
- Over-collateralisationBacking debt with collateral worth more than the debt itself — the standard for permissionless CDP stablecoins.
- CDP (collateralised debt position)A user-opened debt position backed by crypto collateral — the issuance mechanism for DAI, LUSD, GHO, crvUSD.