The base meaning of stablecoin is simply a coin which has a stable value.
The mechanism through which that stability is achieved is often 1:1 redeemability for another stable asset through a central portal, but that's orthogonal to the concept of a stablecoin itself.
I didn't feel the need to expound on this as I specified "algorithmic stablecoin" in my comment and provided a link to the project's homepage which features a short FAQ entry answering that very question:
> RAI is actually one of the first stablecoins. What most people call "stablecoins" are actually pegged coins. Pegged coins are oscillating around a specific value (usually pegged to fiat coins such as USD, EUR etc). RAI, on the other hand, is not pegged to anything. The system behind RAI only cares about the market price getting as close as possible to the redemption price.
The mechanism through which that stability is achieved is often 1:1 redeemability for another stable asset through a central portal, but that's orthogonal to the concept of a stablecoin itself.
I didn't feel the need to expound on this as I specified "algorithmic stablecoin" in my comment and provided a link to the project's homepage which features a short FAQ entry answering that very question:
> RAI is actually one of the first stablecoins. What most people call "stablecoins" are actually pegged coins. Pegged coins are oscillating around a specific value (usually pegged to fiat coins such as USD, EUR etc). RAI, on the other hand, is not pegged to anything. The system behind RAI only cares about the market price getting as close as possible to the redemption price.