What Conditions Typically Trigger the Start of a Death Spiral?

A death spiral is typically triggered by a significant, sustained loss of the stablecoin's peg, often due to a major market crash or a sudden loss of confidence. This de-peg forces the protocol to heavily rely on its peg-restoration mechanism, which involves selling or diluting the volatile governance token.

The resulting drop in the governance token's price then reinforces the stablecoin's de-peg, initiating the spiral.