Stablecoin Peg Defender
You run the desk. A stablecoin promises a dollar, and the market is about to test whether you can keep that promise. Hold the peg.
A simplified teaching model, not a market simulator. Tuned for legible dynamics, not accuracy.
Why this matters
A stablecoin is a promise that one token is always worth one dollar. The promise is not what holds it. What holds it is a pile of credible reserves and a crowd of arbitrageurs who will buy the token below a dollar and redeem it for a dollar, pocketing the difference. That buying pressure is what drags the price back to the peg.
So the real fight is over belief. While the market trusts that the reserves are there, the arbitrage works and the peg is almost boring. The instant that trust cracks, the arbitrageurs step back, the restoring force vanishes, and a small wobble becomes a spiral. Every famous depeg is a version of this same moment. Confidence is the collateral that backs the collateral.