What is the 1% rule for stop-loss?

Could you please explain what the 1% rule for stop-loss is? I'm not entirely familiar with this concept and I'd like to understand how it works in the context of cryptocurrency trading. Does this rule apply universally to all traders, or is it more of a guideline that can be adjusted based on individual risk tolerance and trading strategies? Additionally, how does setting a stop-loss help protect traders from significant losses, and what are some potential drawbacks or considerations to keep in mind when using this rule?