3. Non-Collateralized Stablecoins

Stablecoins may not be secured by fiat, cryptocurrency or any other assets.

Seigniorage Shares is a cryptocurrency concept corresponded to fiat that does not require collateral in other assets.

For example, the issuer algorithmically changes the volume of supply of these Stablecoins to maintain their price.

So, if the “substitute USD” price is above $1, the smart contract will issue additional Stablecoins. It will sell these Stablecoins on the open market until the price falls to the target mark. On the other hand, the issuer buys out tokens in order to maintain the price of a Stablecoin during periods of excessively low rate. If the rate support opportunities are already exhausted, and the price of Stablecoin is still below $1, then the issue releases the so-called “Seigniorage Shares”. The latter enables Stablecoins holders to receive in the future income from seigniorage (the issuer's profit).

Benefits:

1. no need for collateral;
2. theoretically, a higher degree of decentralization and independence, since there is no binding to any fiat currencies or crypto active assets (however, with a general fall in the cryptocurrency market, a decrease in demand for Seigniorage Shares is possible).
   

Disadvantages:

1. a more complex monetary mechanism;
2. the need for steady demand for this kind of Stablecoin;
3. a high degree of vulnerability to stocks in the cryptocurrency market (for example, in case of a market crash, it may be difficult to redeem such coins);
4. the complexity of the analysis and assessment of the viability of such monetary systems.
   

Examples of Non-Collateralized Stablecoins: SagaCoin (SAGA), Havven (HAV), Basis