Depeg

When a stablecoin’s market price drifts away from its intended peg — for example, trading at $0.97 or $1.03 instead of $1.00 — either temporarily or permanently.

Small depegs happen constantly from order-flow imbalance and usually correct through arbitrage. Severe depegs — UST collapsing to cents, USDC dipping to $0.87 during the SVB crisis — reveal design or reserve weaknesses.

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