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What Is a Key Operational Risk Unique to Algorithmic Stablecoins?

The reliance on complex, unaudited, or flawed smart contract code, which can fail or be exploited, leading to a rapid de-peg.
Greeks.Live23.11.25

What Is a Key Operational Risk Unique to Algorithmic Stablecoins?

A key operational risk is the reliance on complex smart contract code. A bug, vulnerability, or flawed logic in the algorithm can be exploited or cause the stability mechanism to fail, leading to a rapid de-peg and a "death spiral." Unlike collateralized coins, there is no physical reserve to fall back on.

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