Depeg
A depeg is when a stablecoin breaks its $1.00 peg — trading at $0.97, $0.60, or $0.0001. Minor wobbles happen in volatility; a sustained depeg means the ma
A depeg is when a stablecoin breaks its $1.00 peg — trading at $0.97, $0.60, or $0.0001. Minor wobbles happen in volatility; a sustained depeg means the market no longer believes each token is redeemable for a dollar.
Why it matters
“Stable” is a promise, not a property. UST’s depeg vaporized tens of billions because the entire Terra ecosystem assumed the peg was a law of nature. Before holding any stablecoin at size, ask: what backs it, who audits the backing, and what happens on the worst day?