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Crypto

How Do Stablecoins Maintain Their Peg?

The Block · 1h ago · 🇺🇸 United States

How Do Stablecoins Maintain Their Peg?

A stablecoin peg is the target price a stablecoin is designed to hold. For the vast majority of stablecoins, this target is one U.S. dollar. Stablecoins maintain that price through two mechanisms. The first is reserves or collateral that give each token its underlying value; the second is an arbitrage process that returns the market […]

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