The mechanics of stable coins is really trivial and thusly should be trivial to implement and validate. Unfortunately it is not, and it is sad that the hype and investment rush inside the broader crypto field does not foster languages and platforms that actually are suitable for the few realworld use cases that exists inside crypto.
But in practice they can work for a while.
They work by taking a collateral and splitting in two. The first part has some fixed value in an external currency. The other part is the rest. And that works as long as the rest has some value.
However here we are talking about programming errors in the implementation. And Solidity/Ethereum is really at fault.
How do you implement a contract in Ethereum where a certain thing happens the price of Ethereum drops below XXXX dollars? You can (as this is what MakerDAO and others are doing) only it is silly complex to do.
It really should not be.
Ethereum is pretty unstoppable, but unless you use a contract proxy, your contracts are immutable and bugs that can be exploited will be exploited.