defi

Swapping out the collateral backing an existing loan for a different asset without liquidating the position or requiring repayment first — letting a borrower proactively adjust their risk exposure instead of passively waiting for <a href="https://crypto-bible.com/en/glossary/derivatives-and-leverage/liquidation/" target="_blank" rel="noopener">Liquidation</a> to happen.

When the value borrowed against <a href="https://crypto-bible.com/en/glossary/defi-basics/stablecoin/" target="_blank" rel="noopener">Stablecoin</a> collateral breaches a safety threshold, the protocol auto-auctions the collateral to repay the debt, and the borrower forfeits a <a href="https://crypto-bible.com/en/glossary/derivatives-and-leverage/liquidation/" target="_blank" rel="noopener">Liquidation</a> penalty in the process.

A pool on a decentralized exchange holding two or more stablecoins, letting traders swap between them with minimal slippage while liquidity providers earn trading fees — the design trades on the assumption that prices barely move, in exchange for higher capital efficiency.

Handing off the actual investing to an automated <a href="https://crypto-bible.com/en/glossary/blockchain-fundamentals/smart-contract/" target="_blank" rel="noopener">Smart Contract</a> that follows a pre-written strategy to allocate your stablecoins across multiple protocols and automatically reinvest for compounding — you don't need to manually manage anything day to day, but you also hand off the judgment of "is this strategy any good" to whoever designed the vault.

An automated-market-maker pricing formula invented by Curve that blends constant-sum and constant-product models, keeping the trading curve nearly flat when pool balances are near equilibrium — dramatically reducing slippage on stablecoin swaps.

An open payment protocol launched by Coinbase in 2025 that revives the HTTP 402 status code, letting AI agents and automated clients pay for single API requests instantly with stablecoins, without accounts or human approval.