**Algorithmic vs. Collateralized Stablecoins: Price Stability Comparison**  

1. **Collateralized (e.g., USDT, USDC)**:  
   - Backed by reserves (cash, bonds, crypto), ensuring tight peg via redemption.  
   - Rarely depeg unless trust in reserves fails (e.g., USDC briefly to $0.99 during 2023 banking crisis).  

2. **Algorithmic (e.g., UST, DAI*):**  
   - Relies on arbitrage/minting mechanisms (not 1:1 collateral), prone to death spirals under stress (e.g., UST’s collapse in 2022).  
   - DAI (hybrid model) maintains stability via overcollateralization + algo adjustments.  

**Key Takeaway**: Collateralized stablecoins are more resilient; algo variants offer higher yields but carry systemic risks. (*Note: DAI is partially collateralized.) (140/140)