What Is a "Bank Run" Scenario for a Decentralized Stablecoin? ▴ Learn

What Is a “Bank Run” Scenario for a Decentralized Stablecoin?

A bank run for a decentralized stablecoin is a rapid, mass redemption or selling event triggered by a loss of confidence in the peg or the backing mechanism. Users rush to sell their stablecoins for a more stable asset before the peg collapses entirely.

This mass exodus overwhelms the protocol's ability to maintain the peg, forcing a rapid, severe de-pegging.

How Is the “Peg” of a Stablecoin Maintained, and What Causes It to Break?

What Is the Systemic Risk Associated with a Major Stablecoin Losing Its Peg?

In What Scenario Would the Funding Rate for a BTC Perpetual Swap Turn Significantly Negative?

What Is a “De-Peg” Event and How Does It Affect Stablecoin Diversification?