What Does Depeg Mean?
A depeg occurs when a cryptocurrency that is designed to maintain a fixed value relative to another asset temporarily or permanently moves away from its intended price. This term is most commonly used in the context of stablecoins, which are typically pegged to fiat currencies like the US dollar.
Stablecoins rely on different mechanisms to maintain their peg, such as fiat reserves, crypto collateral, or algorithms. A depeg can happen when market conditions disrupt these mechanisms, including sudden changes in demand, liquidity shortages, reserve issues, or broader market stress. When this occurs, the stablecoin may trade above or below its target value on exchanges.
While small, short-lived price deviations are relatively common, prolonged or severe depegs can reduce user confidence and increase risk, especially for payments or savings use cases.
KAST is designed with these risks in mind and focuses on supporting established stablecoins across reliable blockchain networks. This helps reduce exposure to volatility and ensures more predictable value when users transfer or spend funds.
