dispatch · Broken Finance

Another Stablecoin Discovers It Wasn't Stable

The eighth 'algorithmic' peg of the year snaps, and everyone is once again shocked that maths written by optimists doesn't hold under fear.

05 Jul 2026 · When the Banks Sleep · Graph ↗

The pitch is always the same: this stablecoin is different, backed by clever incentives instead of boring collateral.

Then the market has a bad Tuesday, the incentives point everyone toward the exit at once, and the peg becomes a suggestion.

What actually happened

  • A large holder blinked first.
  • The mechanism did exactly what it was designed to do, which turned out to be the problem.
  • Twitter threads explaining it were posted after the money left.

The lesson nobody will learn: if you can’t explain what backs it in one sentence, it’s backed by other people staying calm. They won’t.

← Back to the descent

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