Depeg Protection

Stablz as a platform targets new stablecoins as one of the main pools. This is because new, less established stablecoins offer better incentives to attract liquidity to have a larger pool, and thus a more stable price. However, this brings up the risk of loss of peg.

To combat such an event, we have automated monitoring of prices in USD vaults. If one asset does depeg, the team will be notified to monitor the situation. Once an asset loses peg sharply (according to our set threshold), the notification will be issued to the team but the contract will automatically shut down deposits and withdraw all assets. These assets will be stored in any of the other assets that have retained their peg.

Example: User has deposited into a STABLE-A/3CRV pool. If STABLE-A loses its peg sharply, then user assets will be withdrawn and stored in 3CRV LP, which means they can withdraw their assets as USDT, USDC, or DAI. In the event where one of the 3CRV assets loses their peg, the user's assets will be available to them in any of the remaining assets whose peg has not been lost.