A Smart Contract which locks up one cryptocurrency in return for a token, and Allows redemption A token which uses an automatic mechanism to regulate supply A company issues tokens in return for USD, and redeems those same tokens back to USD A smart contract creates and randomly distributes exactly 100 tokens eve

Database System Concepts
7th Edition
ISBN:9780078022159
Author:Abraham Silberschatz Professor, Henry F. Korth, S. Sudarshan
Publisher:Abraham Silberschatz Professor, Henry F. Korth, S. Sudarshan
Chapter1: Introduction
Section: Chapter Questions
Problem 1PE
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Which of the following would NOT be a stablecoin?

  • A Smart Contract which locks up one cryptocurrency in return for a token, and Allows redemption
  • A token which uses an automatic mechanism to regulate supply
  • A company issues tokens in return for USD, and redeems those same tokens back to USD
  • A smart contract creates and randomly distributes exactly 100 tokens every 24 hours
Expert Solution
Step 1

What Is a Stablecoin?

A stablecoin is a type of cryptocurrency whose value is tied to an outside asset, such as the U.S. dollar or gold, to stabilize the price.

Smart contracts have given rise to the use of stablecoins not only in seamless trading but also lending, payments, insurance, prediction markets etc...

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