🦥 Overnighters, let’s unpack stablecoin mechanics with key formulas: 1️⃣ Peg Stability: σ = √(E[(P - 1)²]) – standard deviation of price (P) from $1. USDT’s σ often hovers ~0.01-0.03 daily, signaling tight peg control. 2️⃣ Collateral Ratio: CR = (Collateral Value / Stablecoin Supply) – DAI’s MakerDAO targets CR 150% to ensure overcollateralization, balancing risk. 3️⃣ Liquidation Threshold: LTV = (Debt / Collateral) 0.67 – critical for algo stables to prevent cascading liquidations during volatility (e.g., ETH price drops). 4️⃣ Rebalancing Incentive: RI = (Target Peg - Current Price) * Reserve Factor – used by algorithmic stables like UST (pre-crash) to adjust supply. These keep stablecoins ticking. Dig deeper? | Overnight.fi (USD+) - Vanguard of DeFi OKX Feed

🦥 Overnighters, let’s unpack stablecoin mechanics with key formulas: 1️⃣ Peg Stability: σ = √(E[(P - 1)²]) – standard deviation of price (P) from $1. USDT’s σ often hovers ~0.01-0.03 daily, signaling tight peg control. 2️⃣ Collateral Ratio: CR = (Collateral Value / Stablecoin Supply) – DAI’s MakerDAO targets CR > 150% to ensure overcollateralization, balancing risk. 3️⃣ Liquidation Threshold: LTV = (Debt / Collateral) < 0.67 – critical for algo stables to prevent cascading liquidations during volatility (e.g., ETH price drops). 4️⃣ Rebalancing Incentive: RI = (Target Peg - Current Price) * Reserve Factor – used by algorithmic stables like UST (pre-crash) to adjust supply. These keep stablecoins ticking. Dig deeper?

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