Stablecoins are a type of cryptocurrency designed to maintain a stable value relative to the market, offering a consistent buying power similar to traditional currencies like the dollar. They play a crucial role in decentralized finance (DeFi) by providing a low-volatility medium of exchange, unit of account, and store of value, which most cryptocurrencies like Bitcoin or Ethereum struggle to achieve due to their price volatility. Stablecoins can be categorized based on their relative stability, stability method, and collateral type, with examples including fiat-collateralized, crypto-collateralized, and algorithmic types. The creation of stablecoins often involves minting them through collateralized debt positions, which are usually leveraged by sophisticated investors looking to maximize their returns. The market for stablecoins is competitive, with platforms like Curve.fi playing a significant role in facilitating the exchange and liquidity of these assets. Despite their importance in the crypto ecosystem, stablecoins pose inherent risks, particularly those reliant on endogenous collateral, as seen in the collapse of UST/LUNA. Stablecoins continue to evolve as an essential component of the Web3 landscape, aiming to provide a stable transactional currency amidst volatile crypto markets.