Hey, let's figure out what a depeg is — a term that often comes up in crypto conversations, especially when talking about stablecoins.

A depeg is when a stablecoin loses its peg. It sounds simple, but the consequences can be serious. Take USDT from Tether — it's promised to always be worth $1. But this token doesn't really have intrinsic value; it exists only because people believe that Tether Limited holds equivalent dollar amounts. If the company can't withstand the pressure, a depeg will occur, and USDT will start floating freely.

History has a few worse examples. In 2022, the algorithmic stablecoin UST from Terraform Labs simply collapsed, and the depeg was its last day. The project failed, and investors lost billions. Then, in March 2023, things got wild — BUSD and USDC, two giants among stablecoins, temporarily lost their parity due to panic selling. People were scared, and their fear was justified — these tokens actually fell below $1.

Honestly, in 2023, it became clear that the stability of many leading stablecoins on the market has worsened. A depeg no longer seems impossible — it's a real threat to keep on your radar when working with stablecoins.