Internet
depeg
What does depeg mean?
To slip from a fixed price target — typically a stablecoin drifting from its 1:1 peg — due to lost confidence, thin reserves, panic, or a broken stabilisation mechanism.
"The algorithmic stablecoin depegged and spiralled to near zero."
Origin
Crypto term for a peg failure; infamous after the 2022 UST collapse.
Frequently asked questions
What does depeg mean in crypto?
It means a pegged asset, usually a stablecoin, slips away from its intended fixed value such as drifting off its 1:1 dollar peg.
Why do stablecoins depeg?
Common causes include lost confidence, thin or questionable reserves, mass panic selling, or a broken stabilisation mechanism.
What was the most famous depeg?
The 2022 collapse of the algorithmic stablecoin UST (TerraUSD), which lost its peg and spiralled toward zero, wiping out huge value.
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