--- title: "How each kind of stablecoin holds its peg" author: Mariusz Szyma date: 2026-09-15 lang: en canonical: https://szyma.co/en/blog/stablecoins/types-and-pegs/ series: "Stablecoins: Past, Present and Future" series_part: 3/11 series_url: https://szyma.co/en/blog/stablecoins/ data_as_of: 4–10 Sep 2026 --- # How each kind of stablecoin holds its peg Marketing sorts these tokens as regulated, institutional or decentralized. None of those labels says what happens when a tenth of the holders want out in an hour. This chapter sorts them by what stands behind the token, then shows how to read the reserve page that is supposed to prove it. ## What you'll learn - Sort a dollar token into a mechanism family and name that family's failure point. - Tell DefiLlama's three buckets from the six constructions the tokens actually use. - Read a reserve disclosure well enough to tell a proof of reserves, an attestation and an audit apart. - Apply four questions that cut across families: yield, par redemption, who controls the collateral, and whether an address can be frozen. ## Mechanism, not the label on the box [Chapter 1](/en/blog/stablecoins/what-one-usdc-means/) named three surviving pegs and one extinct design. The live market is slightly richer than that, and the dashboards are slightly poorer. Six constructions answer the stress question. Fiat-backed tokens hold cash and short bills and defend the peg at the issuer's desk. Crypto-backed tokens hold over-posted crypto in a vault and defend it by liquidation. Hybrid tokens mix that vault with tokenized Treasuries and a Peg Stability Module. Synthetic tokens hold a hedged book. Commodity-backed tokens hold metal and do not target one dollar. Algorithmic tokens hold a sister token and, in this material, no longer have a market. DefiLlama, on 4 September 2026, used three buckets: fiat-backed (90 tokens, 285.04 bn USD), crypto-backed (221 tokens, 25.50 bn USD) and algorithmic (23 tokens, 0.67 bn USD). Hybrid and synthetic sit inside "crypto-backed" on that dashboard. USDe has neither a Maker-style vault nor a Circle-style cash window. A risk reading that stops at the label is unfinished. The same day's reference state: 423 tokens on 175 chains; 312.0 bn USD across all pegs, 311.2 bn USD of that USD-pegged; 3.3% below the author's 17 May 2026 peak of 322.4 bn USD. [Chapter 2](/en/blog/stablecoins/history/) records the competing peak figures. ![Five ways to hold a dollar peg, each with its own failure point. Commodity-backed gold tokens are omitted because they do not target $1. Supplies dated 4 Sep 2026 except UST (May 2022).](https://szyma.co/blog/img/five-peg-mechanisms.823f2105.svg) ## Fiat-backed: the desk, and the bank behind it **A fiat-backed stablecoin** holds cash and short-term Treasury bills against the supply, one for one, and defends the peg by mint and redeem at the issuer. The window is institutional: KYC, a signed desk agreement, and a minimum ticket that the knowledge base records as 100,000 USD and up. [Chapter 1](/en/blog/stablecoins/what-one-usdc-means/) left Circle's current floor unlocated; Tether's is the Kaiko figure from April 2026. On 4 September 2026 DefiLlama put USDT at 183.34 bn USD (58.91%) and USDC at 74.46 bn USD (23.93%). The newer four in the same family that day: USD1 at 4.24 bn USD, USDG at 3.18 bn USD, PYUSD at 3.00 bn USD, RLUSD at 2.40 bn USD. RLUSD is the smallest of those four despite the press weight on Ripple's name. The failure point is the bank or custodian that holds the cash, not a market price of the reserve asset. Silicon Valley Bank in March 2023 is the type case. Treasuries in the book did not stop the print. Circle's reserve, on a Deloitte attestation dated 6 November 2025, was about 13% cash and bank deposits and about 87% the Circle Reserve Fund. Circle's 10-K for year-end 2025, relayed in the Polish edition, puts the fund at about 88% of USDC reserves. Those are different dates and slightly different shares; they are not averaged here. Tether's BDO attestation for 30 June 2026 put about 115 bn USD in Treasuries, about 18.83 bn USD in gold, and about 5.8 bn USD in 98,932 bitcoin, with the rest in cash, repo, money-market funds and loans. The GENIUS Act's permitted reserve list is cash, T-bills of 93 days or less, repo, money-market funds and Fed balances. Gold and bitcoin, about 24.6 bn USD of Tether's mid-2026 book, sit outside that list. That is the stated reason Tether is building a separate USAT token through Anchorage rather than putting USDT itself through the federal payment-stablecoin box. > **Watch out:** "1:1 backed" is not one composition. Cash at a regional bank, a Treasury-only fund, and a book that holds gold and bitcoin as an issuer buffer are three different objects that all print as a dollar token. ![Market map of the largest USD-pegged tokens on 4 Sep 2026. USDT and USDC are 82.84% of supply. BUIDL, USYC and USDY are tokenized Treasuries and do not target $1.](https://szyma.co/blog/img/stablecoin-map-2026.0731a512.svg) ## Crypto-backed, and the hybrid that added Treasuries **A collateralized debt position**, a CDP, is a vault that mints a stablecoin against crypto posted in excess of the amount issued. Typical loan-to-value in this material is 60–80%. If the collateral's price falls through the line, the vault is liquidated automatically. GHO, Aave's dollar token, grew from about 35 mn USD to about 565–584 mn USD in 2026. crvUSD sat at about 290–293 mn USD and liquidates through LLAMMA, a band mechanism, rather than a single threshold. Both are still a rounding error next to USDT. The failure point is the one Black Thursday showed: an oracle that is late, or a liquidation engine that cannot keep up. Sky's USDS, with legacy DAI still in circulation, is the hybrid. It keeps crypto vaults and adds tokenized Treasury exposure and a Peg Stability Module that swaps into USDC. USDS peaked at about 12 bn USD in April 2026. On 4 September 2026 the Polish edition's DefiLlama read puts USDS at 6.60 bn USD; the knowledge base records about 8.16 bn USD for September 2026. Both sit here. Legacy DAI is recorded at about 4.47 bn USD in the knowledge base. USDS has a freeze function that DAI never had. Two tokens that look the same in a DeFi pool are not the same object once an address needs to be stopped. ## Synthetic: a hedge instead of a pile **A delta-neutral hedge**, in Ethena's design, is a long spot position against a short perpetual futures position sized so that the net exposure to the crypto's price is supposed to stay near zero. **The funding rate** is the periodic payment between longs and shorts on that perpetual; when it is positive, shorts are paid, and that payment is the yield that sUSDe passes through. USDe has no fiat reserve and no formal par window at an issuer. The peg lives in the hedge and in the secondary market. Supply peaked above 14 bn USD before October 2025; the Polish edition puts the October peak at about 14.7 bn USD and the 4 September 2026 DefiLlama reading at 4.28 bn USD. The failure point is a funding rate that stays negative, so the hedge costs money instead of paying it. USDe is not a payment stablecoin under the GENIUS Act definition in [chapter 1](/en/blog/stablecoins/what-one-usdc-means/). Neither is DAI. Calling them that in a US legal sense is a category error. ## Gold tokens, and the design that went to zero **A commodity-backed token** holds physical metal and redeems into it. PAXG (Paxos) and XAUT (Tether) are the two names in this material. The unit price tracks gold, not 1.00 USD, so they are a poor dollar peg and a different product. No source used for this chapter gives a precise September 2026 supply for either token, so none is stated. The algorithmic design is in the past tense. UST had no reserve. It held the peg by minting and burning LUNA. Supply was above 18 bn USD in early May 2022 and 0.12 USD by 09:00 on 16 May. Combined value of UST and LUNA is recorded at about 60 bn USD to near zero in a week; other sources count about 40 bn USD depending on scope. [Chapter 2](/en/blog/stablecoins/history/) keeps both. The failure is structural: demand for the sister token has to grow without a ceiling. Four questions cut across every family, and two tokens in the same family can answer them differently. 1. Does yield reach the holder. The GENIUS Act bars a payment-stablecoin issuer from paying it directly; wrappers (sUSDe, sUSDS) sit beside that ban. 2. Is there a formal right to redeem at par, or only a secondary market. USDG is described as fully redeemable 1:1, a stronger retail term than USDT's and USDC's institutional desks. USDe has no formal par window. 3. Who controls the collateral: one legal entity, a DAO, or a book of futures positions at venues. 4. Can the issuer freeze an address. USDT and USDC ship a blacklist in the contract. USDS can freeze. DAI could not. > **My take:** Aggregator taxonomies lag the constructions. USDe inside "crypto-backed" is the exhibit. Read the failure point, not the bucket. ## Proof of reserves, attestation, audit Three documents get treated as if they were one. **A proof of reserves** is a cryptographic or on-chain check that some set of assets existed at a moment. It does not, by itself, say those assets are unencumbered, or that they cover the whole liability, or that they existed yesterday. **An attestation** is an accountant's opinion on management's assertion for a stated date, under an AICPA (or, for Tether's BDO reports, ISAE 3000) assurance standard. It is one day's snapshot of what management says the book is. It is not a year-round test of controls. **An audit**, in the reserve-specific sense this chapter uses, is a full examination of the reserve over a period, with an opinion on the statements rather than on one day's assertion. As of 2026, neither USDT nor USDC has a published full reserve-specific annual audit in the sources used here. Circle's financial statements as a public company are a different object from a reserve audit of USDC. USDC's circulating supply differs by method, and the gap is stated as a method gap. Circle's attestation, net of unissued and denied tokens, showed 77.17 bn USD on 30 April 2026. DefiLlama's raw on-chain figure was 73.71 bn USD on 29 June 2026. Different dates, different cuts of the same token. They are not averaged, and they are not evidence that the reserve is short. USDS, in a March 2026 on-chain breakdown with no named third-party attestor, was about 38% USDC through the Peg Stability Module, about 25% crypto vaults, about 22% RWA loans, about 10% Spark, about 5% other. ![Reserve composition for USDC (Deloitte, 6 Nov 2025), USDT (BDO, 30 Jun 2026), USDS (on-chain mix, Mar 2026) and USDe (hedged book, no fiat reserve). One of the four has no named third-party attestor.](https://szyma.co/blog/img/reserve-composition.1eee91a5.svg) Paxos moved PYUSD's attestor to KPMG. That is a change of accountant, not the completed Tether Big Four engagement this chapter is told not to treat as a finished audit. ## Key takeaways 1. Mechanism, not the marketing label, decides the stress question: what stands behind the token, who can reach it, and what fails first. 2. DefiLlama's three buckets on 4 September 2026 (fiat-backed 285.04 bn USD, crypto-backed 25.50 bn USD, algorithmic 0.67 bn USD) fold hybrid and synthetic into crypto-backed and hide USDe's construction. 3. USDT 183.34 bn USD and USDC 74.46 bn USD were 82.84% of USD-pegged supply on that day. The fiat-backed failure point is the bank or custodian, which is the SVB case. 4. USDS peaked near 12 bn USD in April 2026 and is recorded at 6.60 bn USD or about 8.16 bn USD in September 2026 depending on the read; it added a freeze DAI never had. 5. USDe peaked above 14 bn USD before October 2025 and was 4.28 bn USD on 4 September 2026. Its peg is a hedge and a funding rate, not a cash window. 6. A proof of reserves, an attestation and an audit are three different documents. Neither USDT nor USDC has a published full reserve-specific annual audit as of 2026 in these sources. 7. Circle's 77.17 bn USD attestation (30 April 2026) and DefiLlama's 73.71 bn USD on-chain figure (29 June 2026) are a methodology gap, not a contradiction to be averaged. ## Glossary - **Fiat-backed**: cash and short bills held 1:1, peg defended by mint and redeem at the issuer. USDT, USDC. - **Crypto-backed / CDP**: over-posted crypto in a vault; peg defended by liquidation. GHO, crvUSD, historical DAI. - **Hybrid crypto + RWA**: vaults plus tokenized Treasuries and a PSM. Sky's USDS. - **Synthetic / delta-neutral**: long spot against short perpetuals. Ethena's USDe. - **Commodity-backed**: physical metal, price tracks the metal. PAXG, XAUT. Not a dollar peg. - **Proof of reserves**: a moment-in-time check that some assets exist on-chain or in a disclosed address set. - **Attestation**: an accountant's opinion on management's assertion for a stated date. - **Audit** (reserve-specific): a period examination of the reserve statements. Not published for USDT or USDC as of 2026 in this material. - **Blacklist / freeze**: a contract permission that stops an address from sending. USDT and USDC have it; USDS added it; DAI did not. - **Peg Stability Module**: a swap window, used by Sky, that holds the peg by exchanging the native token for USDC rather than by a cash desk. ## Go deeper - [What one USDC actually equals](/en/blog/stablecoins/what-one-usdc-means/): the three layers and the three questions about the loop. - [How ten years of failures selected this market](/en/blog/stablecoins/history/): Black Thursday, Terra and SVB as the failure points of three of these families. - [The business: a spread on T-bills, paid out to distributors](/en/blog/stablecoins/the-business/): how the reserve composition in this chapter becomes issuer revenue. - 🟢 DefiLlama stablecoin dashboard, read 4 September 2026. - 🟢 Circle Reserve Fund / Deloitte attestation, 6 November 2025. - 🟢 Tether BDO attestation, 30 June 2026. ## Sources - 🟢 Author's knowledge base, modules 3 and 5 (six constructions, DefiLlama three-bucket taxonomy, reserve compositions, PoR / attestation / audit, GENIUS Act reserve list, USDC methodology gap). - 🟢 Polish research edition, `content/blog/stablecoins/maszyna.md` (six-row mechanism table, DefiLlama 4 September 2026 supplies and concentration) and `content/blog/stablecoins/biznes.md` (Circle Reserve Fund ~88% at year-end 2025; Tether attestation as ISAE 3000, not a GAAP audit). - 🟢 DefiLlama API, 4 September 2026: 312.0 / 311.2 bn USD, USDT 183.34, USDC 74.46, USDS 6.60, USDe 4.28, top-two 82.84%. - 🟢 Circle Deloitte attestation, 6 November 2025: ~13% cash/deposits, ~87% Circle Reserve Fund. - 🟢 Tether BDO attestation, 30 June 2026: ~115 bn USD Treasuries, ~18.83 bn USD gold, ~5.8 bn USD bitcoin. - 🟡 Knowledge base module 3: USD1 4.24, USDG 3.18, PYUSD 3.00, RLUSD 2.40 bn USD on 4 September 2026; GHO ~35 mn to ~565–584 mn USD; crvUSD ~290–293 mn USD; USDS ~8.16 bn USD September 2026 versus 6.60 bn USD in the Polish DefiLlama read; DAI ~4.47 bn USD. - 🟡 Circle 10-K, March 2026, via the Polish edition: Circle Reserve Fund ~88% of USDC reserves at year-end 2025. - 🟡 USDC attestation 77.17 bn USD (30 April 2026) versus DefiLlama 73.71 bn USD (29 June 2026). ## Caveats PAXG and XAUT have no precise September 2026 supply in these sources. None is stated. USDS's September 2026 supply is 6.60 bn USD in the Polish DefiLlama read and about 8.16 bn USD in the knowledge base. Both are kept. Tether's gold figure has a separate unresolved discrepancy (17.4 bn USD versus about 8 bn USD) recorded in the series caveats. This chapter's 18.83 bn USD gold line is the 30 June 2026 BDO attestation and is not used to settle that earlier gap. A Tether 2026 KPMG or PwC engagement is not treated here as a completed or recurring reserve audit. Circle's circulating-supply gap is a stated methodology difference (attestation net of unissued/denied tokens versus raw on-chain), on two different dates. GHO's 565–584 mn USD range and crvUSD's 290–293 mn USD range are kept as ranges. The 100,000 USD-and-up institutional minimum is a knowledge-base figure for the category; Circle's current desk floor remains unlocated.