What Role Does an Arbitrageur Play in Preventing a Stablecoin’s De-Pegging?

Arbitrageurs profit by exploiting small price differences. If the stablecoin's market price drops below the peg (e.g.

$0.99), they buy the cheap stablecoin and redeem it for $1 worth of collateral (or mint a volatile asset). If the price rises above the peg (e.g.

$1.01), they mint a stablecoin for $1 and sell it for $1.01. This buying/selling pressure pushes the price back to the peg.