The key factor behind a stablecoin’s rising appeal in the cryptocurrency community is the practice of pegging it to an underlying asset. Stablecoins that use algorithms that don’t have any collateral or low collateral associated with them are called algorithmic stablecoins. The term “non-collateralized” stablecoins is used to describe them as a result. Algorithmic Stablecoins are designed to increase market price stability without the need for a central authority and are decentralized. This is frequently accomplished by pre-programming the supply to match the demand for the asset. If you’ve been planning to invest in algorithmic stablecoins, this guide on the top five algorithmic stablecoins could come in handy for you. So. let’s take a look at the top 5 algorithmic stablecoins in the market. 1. FRAX The first stablecoin protocol using a fractional algorithm is Frax. It is one of the best algorithmic stablecoins. Frax is now implemented on Ethereum and 12 other chains and is open-source, permissionless, and on-chain. The aim of the Frax protocol is to replace digital assets with a fixed supply, like BTC, with a highly scalable, decentralized, algorithmic currency. Two stablecoins, FRAX and FPI, are part of the Frax ecosystem (pegged to the Consumer Price Index). To provide a new scalable, trustless, stable on-chain currency, Frax is the first stablecoin protocol to implement design ideas from completely collateralized (such as...
