What is depeg?

Stablecoins trade on open markets, so the price is never exactly $1.0000. A wobble of a few hundredths of a cent is noise. A depeg is a bigger move that sticks, because the market has started to doubt the backing or the exit, and often both.

TerraUSD went from $1 to nearly zero in May 2022 when its algorithmic mint and burn loop fed on itself. USDC hit about $0.87 on March 11, 2023, after Circle said $3.3 billion of its reserves sat at the failed Silicon Valley Bank, and was back near $1 once US regulators guaranteed SVB deposits. Then there is a stranger case. During the October 10, 2025 crash, Ethena's USDe printed about $0.65 on Binance while staying within a fraction of a percent of $1 on Curve and Uniswap. The coin was fine. One exchange's order book was not.

Depegs spread. Lending markets that price a stablecoin at a hard-coded $1 pile up bad debt, and stable pools fill with the weak coin as everyone swaps out of it. And none of this is limited to dollars. Liquid staking tokens and wrapped assets carry pegs of their own and break the same way.

Picture a stablecoin slipping to $0.995 on a rumor about its reserves. If redemptions at $1 are open, arbitrageurs buy the discount and the gap closes within hours. If redemptions are paused or slow, nobody can close it, and the discount tends to widen as holders race each other to the exit.

Also called: depegging, loss of peg.

The Stablecoin risk widget shows how far each coin sits from $1 and marks the row Watch at 0.5 percent off peg and High at 2 percent. Sharp supply drops trigger the same flags. For a hard line, set a Price alert on USDC, USDT, DAI or USDe below, say, $0.995. The widget uses one aggregate DefiLlama price per coin, so a crash on a single exchange may not show up there at all.

• Stablecoin risk
• Market flows

• Stablecoin peg
• Stablecoin
• Liquid staking token
• Stablecoin supply