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What is Pegged Asset?
Crypto Glossary Definition
An asset who's price is designed to remain the same as another asset, such as a stablecoin.
Why Pegged Asset Matters
A peg only holds as long as the mechanism backing it does — fully-reserved stablecoins like USDC maintain their peg through redeemable cash/bond reserves, while algorithmic pegs rely on incentive design alone. TerraUSD's 2022 collapse, where its algorithmic peg failed and it fell to near zero within days, is the starkest example of what happens when a peg breaks.
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