GlossaryBeginner
Peg
The target value a stablecoin is designed to consistently track.
A peg is the specific target value a stablecoin is designed to consistently maintain, most commonly the value of a fiat currency such as the US dollar.
A stablecoin's peg is a design goal maintained through its specific backing and mechanism, not an automatic or guaranteed property of simply being called a "stablecoin."
Examples
- A stablecoin pegged to the US dollar aims to consistently trade at approximately $1.
- How reliably a stablecoin holds its peg depends heavily on its specific backing mechanism.