An overview of low-volatility tokens

Quick Take

  • Low-volatility tokens are loosely pegged to a certain price band in the near term, but their price can drift over time with their ever-changing target price determined by algorithms
  • Reflexer, Float Protocol, and Olympus DAO are some of the notable examples of low-volatility tokens that borrow a lot of features from existing decentralized and algorithmic stablecoins
  • These tokens need to generate organic demand regardless of their underlying algorithms that dampen short-term price volatility
Stablecoins are tokens that peg their value to some commodity that is deemed to have a “stable” value. Most stablecoins such as Tether (USDT) and USD Coin (USDC) are pegged to the US dollar given the extreme demand in cryptocurrency trading against USD.   We have witnessed an exponential growth in stablecoin demand since 2020. More […]

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