Stablecoins projects in crypto market can generally be divided in to two main categories according to their collateral: 1:1 fiat collateralized and cryptocurrency over-collateralized. Different types of stablecoin have their own focus on different market segments in application.
At present, serving as exchange currencies with function of valuation is still the major application scenario for stablecoins. However, the stablecoin has very limited circulation in other application scenarios, subject to two reasons:
For fiat collateralized stablecoins such as USDT, the collateral does not actually exist on blockchain. It is difficult to achieve transparent supervision, and the degree of trust is limited.
The current mainstream digital asset-backed stablecoin (such as DAI) is issued on the public chain of the POW consensus mechanism, which makes the stablecoin circulation efficiency limited and cannot be circulated in more high-frequency scenes.