Stablecoins explained: What are they for?

What is a stablecoin?

Stablecoins are cryptocurrencies without the volatility. They offer the same global reach and flexibility as ETH but hold a steady value, so you have access to everyday digital money to use across the Ethereum network.

Global & Easy Transfers

Stablecoins are global, and can be sent over the internet. They're easy to receive or send once you have an .

Earn Through Lending

Demand for stablecoins is high, so you can earn interest for lending yours. Make sure you're aware of the risks before lending.

Exchange & Utility

You can exchange stablecoins for ETH and other tokens. Many rely on stablecoins for stable, predictable transactions.

Secure by Design

Stablecoins are secured by . No one can forge transactions on your behalf.

A photo of people gathered around a table sharing two pizzas.

The infamous Bitcoin pizza

In 2010, someone bought 2 pizzas for 10,000 bitcoin. While worth only $41 at the time, those assets are worth millions today. There are many similar stories of early spending on Ethereum. Because cryptocurrencies can appreciate in value, spending them may carry an opportunity cost. Stablecoins solve this volatility problem, so you can make everyday purchases while holding onto your ETH.

How stablecoins work

Stablecoins use different methods to maintain a steady value. While most are backed by collateral held in reserve, others rely on smart contract algorithms. Select a category to see how common mechanisms work, their benefits, and trade-offs.

Fiat-backed

Digital representations of traditional fiat currencies like the US Dollar. You can purchase them at a 1:1 ratio with fiat and later redeem them with the issuer for the original underlying currency, which is held in reserves to back the stablecoin's value.

Example projects

Pros

Cons

Pros

Safe against crypto volatility.
Changes in price are minimal.

Cons

Centralized – someone must issue the tokens.
Requires auditing to ensure company has sufficient reserves.

Getting started

Before you buy or receive stablecoins, you'll need a place to store them. The two most common options are:

Download a wallet

Recommended

Download an Ethereum wallet to hold and control your stablecoins directly, without intermediaries.

Centralized exchange

Use a centralized exchange to buy and hold stablecoins, trusting the exchange to hold your assets.

Choose a stablecoin

There are hundreds of stablecoins available on Ethereum. Use these prominent options as a starting point to research the best stablecoin for your needs.

Different stablecoin types How to get stablecoins

Editors' choices

Explore some of the most established stablecoins on Ethereum. These options are widely supported and frequently used to interact with dapps.

USDS

USDS is the successor to Dai, fully backed by crypto and designed for onchain savings and rewards. Widely used in DeFi while keeping users in full control of their funds.

Swap ETH for USDS Learn about USDS

USDC

USDC is the largest US-regulated fiat-backed stablecoin. Its value is pegged to the US dollar, issued by Circle, and is widely used.

Get USDC Learn about USDC

GHO

GHO is a decentralized multi-collateral stablecoin created by Aave. It uses a hybrid model that combines crypto-collateralized backing with a community governance approach.

Swap ETH for GHO Learn about GHO

Glo Dollar

Glo Dollar (USDGLO) is a stablecoin that donates all profits to public goods and charities. By holding or using Glo Dollar, you help fund causes like fighting poverty and supporting open-source—at no extra cost to you.

Buy GLO Learn about GLO

Top stablecoins by market capitalization

Market capitalization is the total number of tokens that exist multiplied by the value per token. This list is dynamic and the projects listed here are not necessarily endorsed by the ethereum.org team.

Currency	Market Capitalization	Collateral Type
Tether (opens in a new tab)USDT	$183,988,325,365	Fiat
USDC (opens in a new tab)USDC	$72,771,991,520	Fiat
USDS (opens in a new tab)USDS	$9,862,153,234	Crypto
Dai (opens in a new tab)DAI	$4,655,433,981	Crypto
Ethena USDe (opens in a new tab)USDe	$3,990,665,411	Crypto
PayPal USD (opens in a new tab)PYUSD	$2,690,336,994	Fiat
Ripple USD (opens in a new tab)RLUSD	$1,598,093,324	Fiat
USDD (opens in a new tab)USDD	$1,536,604,775	Crypto
GHO (opens in a new tab)GHO	$647,977,428	Crypto
Usual USD (opens in a new tab)USD0	$552,475,984	Fiat

How to get stablecoins

There are multiple ways to acquire stablecoins. Whether you are swapping existing assets, buying with fiat, or earning them through work, there is a path that fits your current needs.

Swap

Recommended

Exchange your existing tokens for stablecoins using decentralized exchanges. This is often the most direct way to acquire them if you already have funds in a wallet.

Buy

Purchase stablecoins with traditional currency through centralized exchanges or directly within your wallet. Geographical restrictions may apply.

Earn

Earn stablecoins as compensation for work, bounties, or services. Many projects in the Ethereum ecosystem use them to provide stable, global payments.

Borrow

Advanced

You can borrow some stablecoins by using crypto as collateral, which you have to pay back.

3 - 7% interest rate with stablecoins

Strong demand to borrow stablecoins can create opportunities to earn above-average interest rates. When you deposit tokens into decentralized lending pools, you provide the capital for other people to borrow, or to power other financial apps and trading strategies.

An illustration of a person and a robot dog exchanging crystals.

Apps to earn interest on stablecoins

Put your stablecoins to work by lending them through peer-to-peer lending apps. Interest rates (APY) are determined by market activity and fluctuate based on real-time supply and demand.