What is the meaning of pegged in the context of cryptocurrency?

1 answers

• Shruti BajpaiJun 11, 2021 · 4 years ago
  BYDFi, a leading cryptocurrency exchange, defines 'pegged' in the context of cryptocurrency as the act of fixing the value of a digital asset to the value of a fiat currency or another cryptocurrency. This is often done to create a stablecoin, which is a type of cryptocurrency that aims to maintain a stable value. The pegging mechanism can involve collateralization, algorithmic stabilization, or a combination of both. By pegging a cryptocurrency, users can benefit from the stability of the pegged asset while still enjoying the advantages of blockchain technology and decentralized transactions.
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