What Is a "De-Peg" Event and How Does It Affect Stablecoin Diversification? ⎊ Path

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

A de-peg event occurs when a stablecoin loses its intended price parity with its pegged asset (e.g. $1.00 for a USD-pegged coin).

This directly impacts diversification by turning a supposed low-risk asset into a volatile one, leading to significant treasury losses. It exposes the DAO to the specific risks of the stablecoin’s mechanism or collateral.

How Does a DAO Treasury Differ from a Corporate Treasury?

What Are the Risks of Using Stablecoins for Diversification within a DAO Treasury?

Why Are Stableswap Pools Generally Unsuitable for Volatile, Non-Pegged Asset Pairs?

What Is the Role of Real-World Assets (RWAs) in DAO Treasury Diversification?

What Is ‘Impairment Risk’ in the Context of a DeFi Treasury and How Is It Mitigated?

How Does Portfolio ‘Diversification’ Affect the Overall Margin Requirement in a Risk-Based Model?

Can a Stablecoin-to-Stablecoin Liquidity Pool Experience Impermanent Loss?

How Does a DAO Treasury Manage the Funds Raised from an IDO?

Glossar

Diversification

Allocation ⎊ The strategic distribution of capital across a spectrum of assets ⎊ cryptocurrencies, options contracts, and financial derivatives ⎊ represents a core tenet of risk mitigation.