Lead · Stablecoin Fundamentals
PSM is why USDS almost never deviates more than 0.1% from $1: any time USDS deviates, there's an immediately profitable arbitrage opportunity — arbitrageurs' self-interest automatically restores the price.
Derek Tan
·
June 28, 2026
If you've ever tried buying USDS on a DEX, you may have noticed that regardless of how much you buy (within reasonable amounts), USDS's price is almost always exactly $1 — rarely deviating more than 0.1% even during market stress. In contrast, trying to swap FRAX or some niche stablecoins outside Curve might show much larger slippage and deviations.Behind USDS's 'near-perfect peg' is a key...