Why pegs break
In every depeg event we’ve documented, the cause is one of three things:- The redemption mechanism failed. USDC during the SVB weekend (the bank holding the reserves was in receivership). UST in May 2022 (the mint/burn flywheel went reflexive). Any LST whose stake pool pauses redemptions.
- The market priced doubt faster than redemption could catch up. mSOL in June 2022 — Marinade’s on-chain redemption never moved, but a thin DEX pool printed a panic price for four minutes and an oracle ingested it.
- The mechanism was always asymmetric. Aave’s GHO at launch (mint cap, no PSM) floated below par for 8 months because arbitrage could only push the price down.
Seven asset classes, seven peg shapes
Pegana tracks 22 active assets across six of the seven peg shapes below (assets.toml keys in parentheses) — FX-pegged is defined for completeness but
has no active asset yet. Each shape has a different way of breaking.
| Class | Peg target | Common break mode |
|---|---|---|
SOL-pegged LSTs (lst) | Stake-pool sol_value | Thin venue stress, validator slashing |
Fiat stables (stable_fiat) | $1 redemption claim | Reserve composition shock (SVB-style) |
Yield-bearing (stable_yield) | Issuer-published NAV | NAV itself drops; negative funding for sUSDe |
CDP-collateralized (stable_cdp) | $1 backed by collateral above CR floor | CR slides below 130%; SOL volatility |
Delta-neutral (stable_dn) | $1 via funding-arb perp short | Funding regime flip; basis shock |
FX-pegged (stable_fx) | Issuer redemption claim in non-USD currency | FX volatility, issuer liquidity |
Leveraged synthetic (synth_lev) | Design-intended leverage ratio | Mechanism re-balance, oracle stress |
”Depeg” isn’t binary
A USDC trading at 0.87 over a weekend, with intrinsic at $1.00 and no redemption path until Monday — that’s a depeg. The difference is state and persistence. Pegana resolves this with a 5-state FSM (PEGGED / DRIFT / DEPEG / CRITICAL / UNKNOWN), hysteresis dwell timers (30s entry, 60s exit), and per-asset thresholds calibrated to each asset’s noise profile. A 30 bps spread is DRIFT on jitoSOL and noise on INF. See state machine for the FSM, and hysteresis FSM for why entry and exit thresholds differ.What Pegana is not
- Not a stop-loss oracle. We publish state, not “sell now” signals.
- Not a single-source liquidation feed. Cross-check with Pyth/Switchboard for liquidation pricing. See honesty about limits.
- Not a price oracle. For “fair price,” use Pyth or Switchboard. We are a state oracle — the question we answer is “is this asset still doing what it promises.”
Where to read next
Intrinsic vs market
The two-numbers framing every Pegana signal is built on.
State machine
The 5-state FSM, transitions, and what each state means.
LST peg drift
Why LSTs drift differently from stables, and what the signal looks like.
Case studies
Five real depegs analyzed end-to-end.