Stablecoin
A stablecoin is a token designed to hold a steady value, usually pegged to a currency such as the US dollar. Traders use them as a base currency, but the peg depends on the issuer or mechanism behind it, and pegs can fail.
How they hold a price
Ethereum.org describes stablecoins as tokens designed to stay at a fixed value even when the price of ETH changes. It lists several approaches: fiat-backed coins held against reserves and redeemable with the issuer, crypto-backed coins, coins tied to precious metals, and algorithmic coins that rely on smart-contract logic rather than reserves. USDC and USDT are its examples of fiat-backed coins.
Where the risk sits
For fiat-backed coins, Ethereum.org says the value is only as sound as the reserves, which need auditing, and that users must trust a central issuer. It adds that price changes are minimal, not zero. Each method has trade-offs, and it advises understanding the risks before lending stablecoins to earn interest.
A coin being called stable is not a promise. If confidence in the reserves or mechanism drops, the value can drift from its target, so treat the peg as something to verify rather than assume.
Why traders care
Most pairs on swap venues and perpetuals exchanges are quoted against a stablecoin, so your profit and loss is measured in it. Check which issuer's coin a venue uses for collateral, and whether you can withdraw it. Also note that for tax purposes, swapping between tokens can still be a taxable event in some countries. Rules vary and this is not tax advice.
Common mistakes
Treating every stablecoin as equivalent is the usual error. Reserve quality, issuer jurisdiction, redemption terms and venue support differ between coins. Another is chasing high yield on stablecoins without checking where the yield comes from, which is the lending risk Ethereum.org warns about.
Also keep in mind that holding a stablecoin on a swap venue still exposes you to wallet and contract risk, and that bridged versions of a coin can differ from the original issuer's version. Check the token address against the issuer's official documentation before swapping.
Where this shows up
- Coinbase — Beginners in the US, UK or EU who want a regulated, KYC'd on-ramp with bank funding, and who can trade onchain Base/Solana tokens in the same app.
- Jupiter — Solana traders who want aggregated routing across DEXes with low or zero fees on major and stable pairs.
- Hyperliquid — Perps traders outside the US who want onchain order-book trading from their own wallet, with fees that drop by volume and HYPE staking.
- Uniswap — Traders and liquidity providers who want direct access to Uniswap pools across many EVM chains without an interface fee.
- Koinly — Traders who want to import everything and see their gains before paying, including Solana wallet users syncing by public address.
Sources
Last checked . Fees and terms change often; the venue's own page wins if it disagrees with ours.
- Stablecoins (ethereum.org) — checked 2026-10-17