How to Assess Stablecoin Depeg Risk Using On-Chain Data

Have you ever had this experience — watching the real-time price of USDT on an exchange, suddenly seeing it drop from $1 to $0.98, and feeling a jolt of panic: "Not again, right?" Then you open the community chat and see a flood of rumors, some people shouting to sell, others saying it's just market volatility.

If you've been through something similar, this article is for you. I'll explain in the simplest terms: what a stablecoin depeg is, why it strays from $1, and how ordinary people can use on-chain data to spot this risk early.

As I was writing this, something new happened in the stablecoin world — just last week, an algorithmic stablecoin called MIM depegged on Arbitrum, dropping to $0.87, losing about 11% in two days, and depegging twice within a week. Let's use this recent example as our starting point, learning as we go.

OKX Exchange
A leading global cryptocurrency platform,suitable for both beginners and experienced traders.
New user benefit: 20% off trading fees upon registration!！

Register Now App Download

What is a Stablecoin Depeg and Why Does It Happen

Let's take 30 seconds to clarify the concept.

The term "depeg" sounds a bit technical, but put simply — it's when the real-time market price of a stablecoin shows a clear gap from the $1 it claims to be pegged to. For example, USDT claims a 1:1 peg with the US dollar, but when you find on a DEX that you can only buy 1 USDT for $0.95 worth of tokens, that's called a "depeg."

Why do stablecoins depeg? The reasons usually fall into three categories:

The first type is a true black swan. For example, in March 2023, when Silicon Valley Bank collapsed, USDC's issuer Circle had $3.3 billion in reserves at that bank. As soon as the news broke, market panic caused USDC to drop to $0.87 within a short period. You need to understand, USDC is the second-largest stablecoin after USDT, and its price fell from highs in just a few hours. After the issue subsided, it took over a month to return to $1. The entire DeFi ecosystem was in chaos at the time — because many lending protocols used USDC as collateral, and the price drop triggered a cascade of liquidations.

The second type is liquidity drain. Take last week's MIM incident. Abracadabra's MIM depegged on Arbitrum. According to Blockaid's monitoring, the reason was insufficient or imbalanced liquidity in the liquidity pool on Arbitrum. Simply put: the pool didn't have enough tokens for users to exchange at normal prices. Once someone sells in bulk, the price crashes instantly, and there's no one to buy.

A report from monitoring platform PharosWatch showed the pool balance health was only 12%, marking the second depeg in seven days.

The third type is a flawed underlying mechanism. Algorithmic stablecoins (which aren't backed by real dollar assets but rely on smart contract algorithms and arbitrage mechanisms to maintain the $1 peg) are most susceptible to this issue. MIM, USDe (the third-largest stablecoin issued by Ethena, which dropped to $0.65 in October 2025), and USX (which dropped to $0.10 in December 2025) all fall into this category. Their common trait is: they seem fine when liquidity is abundant, but once the market turns sour, those designed arbitrage mechanisms fail to function, and the price starts to spiral out of control.

The table below gives you a clear overview of the risk characteristics of the three major stablecoin types:

Step One: Monitor Price Deviation in Real-Time

When it comes to practical steps, the simplest is to start with the "price deviation" itself.

You can use DeFiLlama's stablecoins section to track daily price deviation and circulating supply changes. The URL is defillama.com/stablecoins. This page lists all stablecoins and directly shows how far the current price is from $1.

There's also a more automated method called the Stablecoin Depeg Monitor (provided by Apify). This tool tracks the real-time price deviation of over 380 stablecoins daily and categorizes them with labels:

• Normal: Deviation less than 0.1% (10 basis points), essentially negligible
• Watch: Deviation between 0.1% and 0.5%, meaning the price is 0.1 to 0.5 cents away from $1. You can add it to your watchlist.
• Depeg Warning: Deviation between 0.5% and 2%, already clearly off. Consider reducing your position.
• Severe Depeg: Deviation exceeds 2%, take action immediately.

You can set up an indicator, for example, to send yourself a Telegram alert when the deviation reaches 0.25% (25 basis points). This way, you don't need to stare at the screen 24/7.

Take the recent MIM incident. On June 12, it was quoted around $0.871–$0.874 on multiple chains, with a 24-hour drop of about 11%. This deviation far exceeded 2%, placing it in the "Severe Depeg" category. If you had been monitoring with a tool, you might have noticed the anomaly when the deviation first hit 0.5%, instead of reacting only after it fell to $0.87.

Step Two: Monitor Exchange Stablecoin Reserves and Net Flows

If your own assets aren't in trouble yet, but the overall market is at risk, stablecoin data can serve as your "early warning signal."

Look at the latest CryptoQuant data — as of June 13, Bitcoin's 30-day net exchange net flow indicator was approximately +114,000 BTC, meaning a large amount of Bitcoin is being transferred into exchanges, increasing sell pressure. At the same time, the 30-day moving average net flow for stablecoins was approximately -$105 million, remaining in negative territory.

In plain English: more people are selling, and buyers have fewer bullets in their chamber. Analysts believe this simultaneous deterioration on both the supply and demand sides is a significant reason for Bitcoin's roughly 22% decline from its May highs.

Analysts at Gate also pointed out: if the market hopes for a trend reversal, both indicators need to improve simultaneously — BTC needs to turn back into net outflows from exchanges (indicating investor re-accumulation), while stablecoins need to flow back into exchanges (indicating the return of buying power).

What we mean by "stablecoins flowing into exchanges" refers to on-chain data and statistics tracking how much capital enters exchange stablecoin wallets daily. Think of it as a reservoir: the more water (stablecoin capital) in the reservoir, the stronger the buying pressure; when the water level drops, market momentum weakens.

Step Three: Check Reserve Audit Reports — Most Time-Consuming but Most Reassuring

If you plan to hold a particular stablecoin long-term, understanding its reserve situation is crucial. In a nutshell: USDT has "quarterly assurance," USDC has "monthly audits," and the rules and transparency levels differ significantly.

USDC: Most Transparent, Monthly Audits

USDC's issuer, Circle, publishes a reserve report monthly, detailing assets like cash and U.S. Treasuries, with audit opinions from Big Four accounting firms like Deloitte. As of early June 2026, USDC's circulating supply was approximately $7.55 billion, with reserve assets of about $7.57 billion, giving a reserve ratio exceeding 100%. You can download the PDF directly from Circle's transparency page to verify.

USDT: Upgraded to Full Audit

USDT long relied on quarterly attestations (which are not as strict as audits). However, USDT's official team confirmed in early June 2026 that they have hired KPMG for a full audit, officially upgrading from quarterly attestations to comprehensive financial report audits. This means USDT's transparency and credibility are improving.

As of May 2026, USDT's net circulating supply was approximately $18.977 billion, with total assets of about $19.177 billion, also giving a reserve ratio exceeding 100%.

DAI: On-Chain Data Directly Verifiable

The decentralized stablecoin DAI has no central audit, but its reserves are all visible on-chain. You can check the collateral composition and collateralization ratio in real-time on MakerDAO's official page. All data syncs with on-chain smart contracts and cannot be tampered with.

The GENIUS Act, signed in July 2025, explicitly requires: payment stablecoins must be 100% reserve-backed, with monthly disclosure of their composition. While the act sets requirements, it also provides a transition period. Non-compliant stablecoins face the risk of being banned from issuance.

To systematically understand a stablecoin's reserve information, I recommend these steps:

1. Find the issuer's official website and locate the "Transparency" or "Reserve Reports" section

2. Check if there are verification reports issued by Big Four accounting firms

3. Pay attention to the specific composition of the reserves — a higher proportion of cash is safer due to better liquidity for immediate redemption; holding large amounts of long-term bonds or illiquid assets increases risk

4. Compare the total reserve value against the circulating supply. A reserve ratio exceeding 100% is the best safety guarantee

5. For crypto-collateralized stablecoins (like DAI), you must track the collateralization ratio in real-time using on-chain tools. If the ratio falls below a critical threshold, the protocol will automatically trigger forced liquidations

Design Differences of Major Stablecoins, Explained in One Table

The table below helps you sort out the underlying logic and risk points of the most commonly used stablecoins, making it easier to choose based on your needs:

Cryptocurrency for Beginners

Exchanges OKXBinanceGate.ioBybit

CategorysCrypto BasicsTrading StrategiesMarket TrendsCrypto Tutorial

QQX

Copyright © BeelaaSitemap

The content of this article is only for information sharing and does not constitute any form of opinions or suggestions. We do not make any statements, warranties or commitments. Any actions you engage in are strictly at your own risk.