GlossaryIntermediate
Bank Run
A rush of holders trying to withdraw or redeem at once, which can overwhelm a system even if it's genuinely solvent.
A bank run is a situation where a large number of holders try to withdraw or redeem their holdings at once, driven by a fear that others will do the same first — a dynamic that can overwhelm a system's available liquidity even when its underlying backing is genuinely sufficient.
In stablecoins, a bank-run-like dynamic can cause a temporary depeg that is distinct from a true solvency failure, though the two can look similar in the moment.
Examples
- A stablecoin can experience a bank-run-like depeg purely from panic-driven redemptions.
- A bank run can occur even when a system's actual backing is sufficient, simply from a liquidity mismatch in timing.