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What Is the Risk of Using a Stablecoin without a PoR Oracle?

The risk is 'de-pegging' due to unverified or insufficient reserves, relying solely on the issuer's trustworthiness.
Greeks.Live20.11.25

What Is the Risk of Using a Stablecoin without a PoR Oracle?

A stablecoin without a Proof-of-Reserve (PoR) oracle carries the risk of being unbacked or fractional. The issuer's claim that the token is backed 1:1 by a reserve asset (like USD) must be taken on faith, creating counterparty risk.

If the reserve is insufficient, the stablecoin could 'de-peg' and lose its value, leading to a loss of user funds and systemic instability across DeFi protocols that rely on it as collateral.

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