From TerraUSD to YU: Why stablecoins fail to hold $1 and the risks investors can’t ignore

From TerraUSD’s crash to Yala’s YU, several stablecoins have failed to hold their peg. Here’s why depegging happens and the risks you can’t afford to ignore.

Stablecoins are nearing a $300-billion market cap, but adoption remains limited due to risks around depegging, collateral and trust.

The depegging of stablecoins such as NuBits (2018), TerraUSD (2022) and USDC (2023) has revealed vulnerabilities across both algorithmic and fiat-backed models.

The collapse of TerraUSD wiped out roughly $50 billion in value and exposed the systemic fragility of algorithmic designs.

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