Depeg

When a stablecoin trades materially away from its intended reference price (typically $1.00). Small intraday deviations of a few basis points are normal and usually arbitraged away within minutes. A 'depeg event' refers to a sustained or large deviation — for example, USDC trading at $0.87 on 11 March 2023 during the Silicon Valley Bank weekend, or TerraUSD's terminal collapse from $1.00 to under $0.01 in May 2022. Depegs can be temporary (USDC's recovered within days once SVB depositors were made whole) or terminal (TerraUSD never recovered because the algorithmic design failed structurally).