Stablecoins don't always hold the peg.
When a stablecoin drifts from $1, it's called a depeg. Seen it happen with $UST, $USDC during the banking crisis, and countless algo stables.
Before you park liquidity in any stable, understand:
• What backs it (fiat reserves, crypto collateral, or algo magic)
• Depeg risk = your $1 might be worth $0.95 or $0.70 when you need to exit
• Not all stables are equal. $USDT and $USDC dominate for a reason.
Don't ape into yields without checking the peg mechanism. Depeg = rekt.
When a stablecoin drifts from $1, it's called a depeg. Seen it happen with $UST, $USDC during the banking crisis, and countless algo stables.
Before you park liquidity in any stable, understand:
• What backs it (fiat reserves, crypto collateral, or algo magic)
• Depeg risk = your $1 might be worth $0.95 or $0.70 when you need to exit
• Not all stables are equal. $USDT and $USDC dominate for a reason.
Don't ape into yields without checking the peg mechanism. Depeg = rekt.
