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What is Depeg?

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When an asset designed to hold its value fixed to a particular reference moves away from that reference. Stablecoins are the typical case. Because such assets are widely used as collateral and a means of payment on the premise of being safe, once the departure begins it easily spreads into falling collateral value and cascading liquidations. What backs the value matters more than the size of the departure.

Depegthe fixed pegdeparture from the pegit served as collateral and settlement, so a departure spreads

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Depeg meaning — Trading glossary | MarketSurfer