Summary

• This article focuses on the stablecoin category called 'Multi-Collateral-Backed Stablecoins' and delves into how reserves are managed, how yield and incentives are distributed, how accessible and integrated the tokens are, and how governance and compliance influence their resilience.
• Considered the original crypto-native stablecoin type, multi-collateral-backed stablecoins peaked in late 2021 at ~7% of the stablecoin market and have dropped to ~4% market share.
• The Spark Liquidity Layer represents the second largest portion of reserves and comprises five main stablecoins: USDT, PYUSD, USDS, USDC, and DAI.

By Raye Hadi

Introduction

In Part One of ARK’s four-part guide to stablecoins, we introduced stablecoins and presented the design concept and history that contextualize their development. I argued that each type of stablecoin design presents tradeoffs and consequences