Market Analysis & Methodology

The Stablecoin Peg Monitor provides real-time oversight of critical DeFi infrastructure. Our proprietary Peg Health Score algorithm aggregates deviation metrics across major USD and Euro-denominated assets to produce a single, actionable system status.

A score of 100 indicates perfect alignment with fiat targets, while scores below 85 signal rising market volatility. Maintaining awareness of peg stability is vital for liquidity providers; when a stablecoin deviates significantly (e.g., >1.5%), smart contract risk premiums often spike.

Understanding Asset Pegs

Not all stablecoins maintain their value through the same mechanisms. This dashboard tracks three primary categories:

• Fiat-Collateralised (USDC, USDT, EURC): Backed 1:1 by reserves of fiat currency and treasuries held in traditional bank accounts.
• Crypto-Collateralised (DAI, LUSD): Backed by on-chain assets (like ETH) in over-collateralised vaults.
• Algorithmic: Rely on arbitrage incentives and supply elasticity to maintain parity (highest risk profile).

Interpreting the Deviation Data

Minor fluctuations (0.01% - 0.10%) are standard in efficient markets and represent the cost of swapping assets. These micro-deviations often present arbitrage opportunities for high-frequency traders. However, sustained deviations >0.50% (marked "Watch") suggest liquidity imbalances on Curve or Uniswap pools.

Note on EURC: Unlike USD assets, EURC is pegged to the Euro. Our system fetches live Forex rates (EUR/USD) to normalise the display. If EURC trades at $1.08 USD, and the Forex rate is $1.08, we display this as €1.00 (Parity) to avoid false alarms.