Peg

The fixed reference value a stablecoin aims to hold.

Stablecoins & Payments Also called depeg, pegged

A peg is maintained by arbitrage: if the token trades below par, buyers redeem it with the issuer at face value for a profit, pushing the price back up.

A depeg happens when that mechanism breaks or confidence in the backing collapses. Depegs have ranged from brief dips of a fraction of a cent to total loss.

Back to the Crypto Glossary