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DeFi & governance

Stablecoins: the peg and the claim behind it

Reserve assets, redemption rights and transfer controls can matter more than the current price.

DeFi guide · 1 min read

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  1. Identify the route to redemption

A stablecoin aims to track a reference value, often a currency. Designs differ: some depend on reserve assets and an issuer; others use collateralised positions or endogenous incentives. A price near one dollar during calm markets does not prove that every holder can redeem one dollar during stress.

Identify the route to redemption

Who owes the obligation? Which users may redeem directly? What assets back it, where are they held and how often is the evidence updated? What restrictions apply to transfers or redemptions? A token's existence on a public chain does not answer those questions.

An attestation, a reserve report and a financial-statement audit have different scopes. Read the report date and what was examined rather than treating every document as a full solvency guarantee. Bridged versions introduce another dependency on top of the issuer.

The USD1 case examines incentives around adoption. The Terra case concerns a different design and historical failure. They should not be treated as interchangeable examples merely because both use the term stablecoin.

Sources

  1. Circle: reserve transparency
  2. MASTR: Crypto Survival Guide, four original panels

Research checked 5 September 2026. Historical cases retain the date and legal status of the cited record.

Related reading

scams

Counterfeit stablecoins

A token copies a major stablecoin name without the issuer's contract or redemption claim.

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