What is the definition of pegged in the context of cryptocurrency?

3 answers

• dbraven26Oct 03, 2024 · a year ago
  When a coin is pegged in the context of cryptocurrency, it means that its value is tied to the value of another asset, usually a stablecoin or a fiat currency. This is done to provide stability and reduce volatility in the price of the coin. For example, a cryptocurrency may be pegged to the US dollar, which means that the value of the cryptocurrency will always be equal to one US dollar. This can be achieved through various mechanisms, such as holding reserves of the pegged asset or using smart contracts to maintain the peg.
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• Thanigaivelan BaluJan 26, 2024 · 2 years ago
  Pegged in the context of cryptocurrency refers to the practice of linking the value of a coin to the value of another asset. This is often done to provide stability and reduce the risk of price fluctuations. For example, a cryptocurrency may be pegged to the price of gold, which means that the value of the cryptocurrency will fluctuate in line with the price of gold. This can be achieved through mechanisms such as algorithmic adjustments or manual interventions by the project team.
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• SuriyaMay 08, 2021 · 5 years ago
  In the context of cryptocurrency, pegged refers to the process of fixing the value of a coin to a specific asset or currency. This is done to maintain a stable value and reduce the impact of market volatility. For example, a cryptocurrency may be pegged to a stablecoin like Tether, which means that the value of the cryptocurrency will always be equal to the value of one Tether. This can be beneficial for traders and investors who want to avoid the risk of price fluctuations in the cryptocurrency market.
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