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How Do Decentralized Autonomous Organizations (DAOs) Attempt to Manage a Stablecoin Death Spiral?

DAOs use emergency governance votes to deploy treasury funds, adjust protocol parameters, or implement temporary trading restrictions to restore the peg.
Greeks.Live22.11.25

How Do Decentralized Autonomous Organizations (DAOs) Attempt to Manage a Stablecoin Death Spiral?

A DAO, which governs a decentralized stablecoin, manages a death spiral through emergency governance votes. Actions may include deploying treasury funds to buy the stablecoin on the open market, adjusting key protocol parameters like collateralization ratios or liquidation penalties, or implementing emergency measures like a temporary trading halt or redemption fee.

The effectiveness relies on the speed of the vote and the solvency of the DAO's treasury.

How Does a DAO Treasury Differ from a Corporate Treasury?
How Does the Inflation Rate Affect the Risk of a ‘Death Spiral’ in an Algorithmic Stablecoin?
How Does the Collateralization Ratio of a Stablecoin Influence Its Vulnerability to a Death Spiral?
What Specific Market Conditions Can Trigger a Death Spiral in an Algorithmic Stablecoin?

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