Stablecoin De-peg
Loss of stable value by a stablecoin — when USDT, USDC or DAI drops below $1.
Stablecoin de-peg is a situation when a stablecoin loses its peg to the reference asset (usually $1) — a potentially catastrophic event for DeFi and crypto markets.
Types of de-peg scenarios:
1. Algorithmic stablecoin collapse • TerraUSD (UST) — algorithmically pegged with LUNA • May 2022: UST de-pegged and crashed 99.9% • LUNA from $80 to $0.0001 in 72h • $40+ billion in market value destroyed
2. Centralized stablecoin crisis • USDC: March 2023, $0.87 due to SVB bankruptcy • Recovered after US Treasury intervention
3. Tether fears • Periodic speculative attacks on USDT peg • Always returned to $1 so far
4. DAI partial de-peg • Depends on collateral — if ETH falls dramatically
How to protect yourself: