Depeg
What is a depeg in DeFi?
When a token designed to trade at a fixed price moves materially away from that price. Most commonly applied to stablecoins (USDC briefly traded at $0.87 during the SVB crisis in March 2023) and LSTs during liquidity crises. A depeg can be temporary, corrected by arbitrage once the underlying issue resolves, or permanent, as with UST/Luna in 2022. The mechanism behind the peg determines its resilience under stress.