Fiat-backed
A company holds cash and short-term instruments and issues tokens against them. The peg holds because large holders can redeem at par, and arbitrage transmits that to the market.
The risks are the issuer's solvency, the quality of reserves, who is actually allowed to redeem, and the issuer's ability to freeze balances. Attestations are point-in-time reviews, not continuous guarantees.
Redemption access is the detail that decides whether the peg has a floor under it. If only vetted institutional accounts above a large minimum can redeem at par, the mechanism still functions, but it functions through them, and it stops functioning if they decline to act.
Crypto-backed
Overcollateralised with volatile assets, with positions liquidated when collateral falls below a threshold. No company holds reserves, and the mechanism is verifiable on-chain.
The risks are a collateral crash faster than liquidations can clear, oracle failure during volatility, and governance decisions about collateral types. Many such systems now hold significant fiat-backed stablecoins as collateral, which reimports that risk.
Algorithmic
Peg maintained by supply adjustment or an arbitrage loop with a companion token, without sufficient external collateral. The mechanism depends on continued demand for the companion asset.
This design has failed repeatedly and at enormous scale. The failure mode is reflexive: the conditions that stress the peg also destroy the asset meant to defend it.
Choosing between them
For holding value, the live questions are counterparty exposure, freeze capability, and how the mechanism behaves under stress rather than in calm markets. Diversifying across designs reduces correlated exposure.
FBT Swap lists widely used stablecoins across its supported networks and shows the route and price impact for each. It does not issue stablecoins and takes no position on which to hold.