  In May 2022, an apparent speculative attack, followed by market panic, led to
the precipitous downfall of UST, one of the most popular stablecoins at that
time. However, UST is not the only stablecoin to have been depegged in the
past. Designing resilient and long-term stable coins, therefore, appears to
present a hard challenge.
  To further scrutinize existing stablecoin designs and ultimately lead to more
robust systems, we need to understand where volatility emerges. Our work
provides a game-theoretical model aiming to help identify why stablecoins
suffer from a depeg. This game-theoretical model reveals that stablecoins have
different price equilibria depending on the coin's architecture and mechanism
to minimize volatility. Moreover, our theory is supported by extensive
empirical data, spanning $1$ year. To that end, we collect daily prices for 22
stablecoins and on-chain data from five blockchains including the Ethereum and
the Terra blockchain.
