I've been reviewing something that many still don't fully understand in crypto: what really happens when a stablecoin loses its peg. Basically, a depeg is when everything goes to hell.

Let's take USDT as a reference. Tether claims that each token is worth exactly $1 because they supposedly hold real dollars in their accounts. But here's the interesting part: there's nothing tangible backing that token in your wallet. It's pure faith. If Tether Limited doesn't have the dollars it claims to have, or if for some reason they can't fulfill their obligations, then boom, the depeg occurs and USDT floats freely without an anchor.

I looked at the cases that happened, and they are quite revealing. In 2022, we had the Terraform Labs UST disaster, which was supposed to be a revolutionary algorithmic stablecoin. Spoiler: it wasn't. It collapsed and practically disappeared from the map. Then in March 2023, we saw something few expected: BUSD and USDC, two of the largest stablecoins, literally lost their 1:1 parity with the dollar. The FUD was brutal, and these tokens temporarily depegged. That was a depeg that shook many people.

What catches my attention is that throughout 2023, we saw how the stability of many leading stablecoins deteriorated. Apparently, depegging isn't as rare as we thought years ago. It's as if the market finally understood that these coins aren't as solid as they promise.

For me, this is a reminder that in crypto, not everything is what it seems. Before investing capital in any stablecoin, it's worth understanding what's really behind it.