I've heard that many people get confused about the term "depeg" — let's clarify what is really happening here.

Depegging, or unpegging, occurs when a stablecoin loses its peg to the underlying asset it is supposed to be linked to. Take Tether (USDT) as the main example. This coin promises to always be worth exactly one dollar. But that's not because the code explicitly states that value — it's a matter of trust. People believe that the company has a real dollar in the bank for every token issued. If that trust is broken or the company cannot verify its reserves, depegging becomes a reality.

History has shown us several vivid examples. In 2022, there was the complete collapse of Terraform Labs' algorithmic stablecoin UST — it was not just a depeg, it was a total collapse. The token fell from its parity and never recovered. And in 2023, we saw situations with stablecoins BUSD and USDC, when they temporarily lost their 1-to-1 parity with the dollar due to a wave of panic and FUD in the market. Many then realized that even major stablecoins are not immune to such scenarios.

Today, depegging is no longer just a theoretical risk. We have seen that in 2023, the stability of many leading stablecoins significantly deteriorated. This makes market participants more cautious when choosing which stablecoin to use for storing funds. In short, depegging is something that can happen to any stablecoin, and it’s important to understand that.