JejuSunshineSoul
Tue Nov 19 2024
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7 answers
1443
How does a stablecoin lose its peg?
A stablecoin can lose its peg due to various reasons. For instance, if the collateral backing the stablecoin becomes insufficient or illiquid, it can affect the stablecoin's ability to maintain its peg. Additionally, market volatility, lack of transparency, and regulatory issues can also contribute to a stablecoin losing its peg. When this happens, the value of the stablecoin can fluctuate significantly, causing investors to lose confidence and potentially leading to a sell-off.
