How Do Arbitrageurs Profit from a Stablecoin De-Peg?

Arbitrageurs profit by exploiting the price difference between the stablecoin's market price and its intended $1 peg, often using the protocol's built-in mechanisms. If the stablecoin is below $1, they buy it cheaply and use it in the protocol to mint or acquire $1 worth of the volatile governance token, locking in a profit.

If it's above $1, they mint the stablecoin for $1 and sell it on the open market.