All lessons

Understand crypto before trading

1What is crypto trading? 2Blockchains, ledgers and consensus 3Bitcoin, Ethereum, coins and tokens 4Build a safe practice plan

Wallets and personal security

5Wallets, keys and custody 6Recovery phrases and backups 7Networks, addresses and transfers 8Phishing, approvals and scams

Understand the trading venue

9Centralized and decentralized venues 10Pairs, order books and spreads 11Spot orders and execution 12Fees, slippage and liquidity

Risk before returns

13Size a spot position 14Portfolio concentration and correlations 15Drawdown, R multiples and expectancy 16Stablecoins and counterparty risk

Read crypto market structure

17Candles and an around-the-clock market 18Trends, ranges and price levels 19Breakouts, volume and confirmation 20Indicators and volatility

Apply chart frameworks to crypto

21Dow-style structure: what would change your view? 22Wyckoff in spot crypto: read the range carefully 23Elliott counts: keep an alternative on the page 24Liquidity sweeps: separate the wick from the story 25FVG and OTE: transfer the rules, not the promises

Understand asset economics

26Supply, market cap and FDV 27Token unlocks and distribution 28Network activity and on-chain data 29Research a project critically

Understand derivatives before considering them

30Spot, futures and perpetual contracts 31Funding, basis and mark price 32Margin, leverage and liquidation 33Open interest and liquidation data

Derivatives through paper examples

34Linear perpetual P&L: calculate the money, not the excitement 35Collateral and liquidation: a deliberately simplified worksheet 36Funding carry: count what you keep 37Dated futures: follow both sides of the hedge 38Calls and puts: payoff is not profit

Explore DeFi with caution

39Smart contracts and applications 40AMM pools and price impact 41Liquidity provision and changing asset value 42Staking, lending and bridges

Understand ecosystem risks

43Constant-product AMMs: calculate the moving price 44LP divergence loss: choose the right comparison 45Reorgs, bridges and L2s: what is actually final? 46MEV and arbitrage: subtract the competition 47DEX approvals: inspect before you sign

Build and test market hypotheses

48Market context and catalysts 49Write a setup rulebook 50Profiles, order flow and SMC limits 51Backtest crypto data honestly

Research, allocation and review

52Token vesting: size the unlock, then ask why 53On-chain metrics: count activity, not stories 54Stablecoin depeg: map access, not just reserves 55Rebalancing: weights change even when you do nothing 56Advanced crypto capstone: defend the whole plan

Practice, review and stay informed

57Paper trade and keep a journal 58FOMO and decision routines 59Records, local rules and changing information 60Capstone: research and risk plan

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Stablecoins and counterparty risk

3 min read

“Stable” describes an aim, not an unconditional promise. Ask what supports the peg and how redemption works.

Here is what we will figure out

Treat a target price as a design goal rather than a guarantee.

A stablecoin aims to track a reference such as a currency. Its market price can still move away from that target. Models differ: reserves held by an issuer, crypto collateral and algorithmic mechanisms create different dependencies and failure paths.

Ask who can redeem, under what conditions and for what asset. A reserve report is not identical to unrestricted redemption or complete financial statements. Assets held through an exchange also add that exchange's risk to the token's own issuer or mechanism risk.

Depegging can arise from doubts about reserves, collateral losses, redemption disruption or stressed liquidity. A quote of 1 today does not establish that you can realize 1 tomorrow. Compare currency denomination, legal claims and actual exit routes without assuming every holder has the same rights.

Let’s use numbers · hypothetical example

Hypothetical: 1,000 tokens target 1 each but trade at 0.92. Selling at that price returns 920 before costs, an 80-unit decline. Calling them 'cash' would hide the change in realizable value.

Keep in mind

Stablecoin balances may lack the protections applicable to bank deposits in your jurisdiction.

Your turn

For a fictional token, list reserve, issuer, custody, redemption and liquidity questions.

A quick check before we move on

Does a stable price target guarantee redemption at that price?

Only if the ticker includes USD
No
Yes

Check answer

No Redemption rights, available liquidity and mechanism performance must be examined separately.

Sources and further reading

Content reviewed: 29 October 2026