Overcollateralization
Overcollateralization means locking collateral worth more than the issued stablecoin or loan, providing a buffer against price moves.
Category
Stablecoin Design
These terms cover collateral models and basic mechanisms used to target a stable value on-chain.
How to recognize this theme
Words about how stablecoins are created and kept stable.
In a daily board, this category groups terms by their shared role. Look for four cards that describe the same mechanism, risk area, or workflow rather than four words that merely sound similar.
Educational context
These entries are vocabulary notes for learning. They are not project endorsements, token recommendations, exchange rankings, or trading signals.
Algorithmic Stablecoin
An algorithmic stablecoin targets a stable value primarily through on-chain rules and incentives rather than direct asset backing.
Mint and Burn
Minting creates new tokens and burning destroys tokens, changing total supply in response to deposits, redemptions, or protocol rules.
Redemption Queue
A redemption queue is a mechanism that processes withdrawals in order when immediate redemption is limited by liquidity or rate limits.