Study: Stablecoin depegs show threshold effect, severe narrative shocks can trigger panic selling

TREE NEWS reports: A study published by Renmin University’s FinTech Institute, based on LLM agents analyzing stablecoin depeg risks, finds that depegs exhibit nonlinear and threshold characteristics. Arbitrage absorbs information pressure until narrative severity reaches a critical threshold, after which the system may rapidly enter a sustained depeg state. The crisis unfolds through a self-reinforcing process: severe narrative shock, fear, liquidity deterioration, retail selling, arbitrageur retreat, order imbalance, and sustained depeg.