The essentials
Stablecoins target a reference value, commonly one US dollar. Some hold reserves with custodians, some rely on excess crypto collateral and others use algorithmic mechanisms.
What to consider
A target price is not a guarantee. Redemption restrictions, banking disruption, collateral volatility and governance failures can cause a stablecoin to trade away from its peg.
Put it into practice
Read reserve reports and redemption terms. Consider issuer, chain and bridge exposure separately; spreading tokens across wallets does not diversify the same underlying issuer risk.