Peg
Stablecoins
7 references
A target exchange rate between a stablecoin and its reference asset, such as 1 token = 1 USD. Maintaining a peg typically requires a mechanism like redemption, collateralization, or market incentives.
Appears in 7 whitepaper sections
$USDT
Tether
Advantages
...economic incentive structures and automated supply management to maintain their peg, Tether's stability derives from a direct relationship: each token is backed by...
Challenges and Risks
...cess new deposits and redemptions would be impaired, potentially disrupting the peg mechanism. Even temporary disruptions in banking access could create uncertaint...
$USDC
USD Coin
Abstract
...ustment mechanisms or opaque collateral arrangements, USDC maintains its dollar peg through the straightforward mechanism of full reserve backing, with regular ind...
Background
...ent mechanisms -- expanding token supply when demand pushes the price above the peg and contracting supply when selling pressure drives the price below it. These m...
Design Principles
...hat the fundamental value proposition of a stablecoin is the reliability of its peg, not the return on its reserves.
The reserves undergo monthly attestation by i...
Reserve Management
...anagement is the operational foundation that maintains USDC's one-to-one dollar peg. The reserve management framework is designed around three core objectives: ens...
Conclusion
...d token issuance.
The reserve management practices that underpin USDC's dollar peg represent the most conservative approach in the stablecoin industry. The exclus...
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