In the crypto market, stablecoins are designed to maintain a fixed value, usually pegged to 1 USD, acting as a stabilizer in a volatile ecosystem. However, when this peg breaks, the phenomenon is known as depegging . This blog post explores what depegging is, its causes, real-world cases, and strategies for managing it.     What is Depegging? Depegging refers to a situation where the market price of a stablecoin deviates from its intended value, usually $1.00. Since “peg” implies a fixed link, depegging indicates a breakdown of that link. For example, if USDC drops to $0.92 or climbs to $1.08, it is considered depegged. These deviations often cause panic and volatility in the crypto market. Why Does Depegging Happen? There are various factors that may lead to depegging: Insufficient Reserves: If the stablecoin isn’t fully backed by actual fiat or assets. Market Panic: Negative news, hacks, or operational uncertainty may cause mass selling....