Coins, Tokens & Crypto Assets
A peg is not a property. It's a promise.
Bitcoin swings. Stablecoins are built to do the opposite and sit still at a reference value — usually about one US dollar. That number holds for exactly as long as the backing, the redeemability and the confidence behind it hold.
The problem
It reads 1.000. Now put weight on it.
Three pressures, one press each, in the order they usually arrive. Watch the marker and watch the second row — the one that says whether you can still get out at the target value.
A dollar stablecoin under load
ILLUSTRATIVE MODELCalm. Every token can be handed back and converted at the target value. Nothing here is a real coin, and no real issuer or historical event is being described — this is a model of the mechanism. Press Slow the redemptions.
That is a depeg: the stablecoin loses the price it is designed to hold. Notice what actually caused it. Nobody switched off the blockchain and no cryptography failed. What broke was the chain of backing → redeemability → confidence. Holders could not verify what stood behind the token, so they stopped believing they could convert it back — and a value that only exists because people believe it stops existing when they stop. The stability a stablecoin aims at is not guaranteed.
Protected by a state deposit-guarantee scheme, up to that scheme's limit. If the bank fails, a fund outside the bank stands behind your balance. Section 1 spent a whole lesson on this.
A promise from whoever issued it. There is no state deposit insurance. If the issuer fails, there is no deposit-guarantee fund to turn to — the claim is on them, and only on them.
The definition
Three things the 1.00 on the screen hides.
Tap each card for what is really sitting behind that number.
Hands on
A trader sells after a strong run — and stays in the market.
They do not want the payout to a bank account and they do not want to keep holding the swing. They move into a dollar stablecoin: value parked, volatility stepped out of, still inside the crypto system and one move away from anything else. That is one of three jobs stablecoins do. Pick each one.
Trading unit, fiat bridge, DeFi building block. Stablecoins are core infrastructure of the crypto market — which is exactly why it weighs so heavily when their stability starts to wobble.
The bridge
Four things to look at, none of which is the price.
Stablecoins are not one uniform category. These are the questions that separate them.
Three questions get you a long way with any of them: what actually backs it, can I redeem it, and who says so. Section 4 takes stablecoins apart properly — the different backing models and how each behaves under stress. Next, though, the token that keeps a whole chain running: platform tokens, the economic backbone of entire blockchains.
Check yourself
Five questions.
Answers come straight from this lesson. Submitting completes it.