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Crypto-collateralized stablecoins lock crypto-assets such as ETH as collateral — with a significantly higher value — to back their stable tokens. This way, whenever the backing crypto-asset loses value to lower levels than the value of stable tokens, the peg is broken and the system collapses as a consequence. Accordingly, many people believe stablecoins of the kind are like ticking bombs and can be detonated at any moment.