Stablecoin run simulator
Each token claims $1 of reserves. To pay redeemers the issuer must sell reserves in a hurry, and a fire sale recovers only part of their value. Move the two sliders and watch whether the peg survives the rush for the exit.
PEG BREAKS. Recoverable value is $0.989 per token, below the $1 claim. First movers still cash out at $1; the loss lands on whoever waits.
Reserve sold (par)21.1% of pool
Cash raised$0.200
Loss to the pool$0.011
Recoverable / token$0.989
First mover (redeems)$1.000
Late mover (waits)$0.987
Recoverable / token = 1 − min(f/(1−h), 1)·h, the haircut on the reserves that must be sold (capped at the whole pool) spread across the whole supply. That gap is the incentive to redeem first.
Fire-sale haircut (h)5%
Share redeeming at once (f)20%
Try this:
Discuss. A stablecoin can be fully backed at par and still de-peg under stress. Why does the chance to redeem first turn a liquidity problem into a self-fuelling run, and how do cash-like reserves (versus longer or riskier assets) change the haircut you would expect?