Main Types of Stablecoins

Fiat-backed: Backed by cash or treasury reserves (e.g., USDT, USDC). These offer the highest stability but require strict issuer transparency.

Crypto-collateralized: Over-collateralized by other cryptocurrencies (like ETH) and managed by smart contracts to offset price fluctuations.

Algorithmic/Hybrid: Uses code to automatically expand or contract supply to maintain the peg, but carries a very high risk of depegging.

Yield-bearing: Combines collateral with investment strategies to generate returns.

Key Risks to Consider
Stability is a promise, not an absolute guarantee. Users face reserve risks (issuer lacking actual funds), depeg risks (price dropping below $1), centralization risks (issuers freezing addresses), and smart contract vulnerabilities.

Real-World Application at InterLink Labs
The ITLX Pay ecosystem currently utilizes stablecoins as its primary payment rail to connect on-chain assets with real-world commerce (e.g., purchasing Amazon Gift Cards), eliminating price volatility risks. In the future, the system will gradually transition to using the native $ITL token as a real-world payment currency.