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.

Decentralized Autonomous Organizations (DAOs) have emerged as a novel way to coordinate a group of (pseudonymous) entities toward a shared vision (e.g., promoting sustainability). In just a few years, over 4,000 DAOs have been launched in various domains, such as investment, education, health, and research. Despite such rapid growth and diversity, it is unclear how these DAOs actually work in practice. Given this, we aim to unpack how (well) DAOs work in practice. We conducted an in-depth analysis of a diverse set of 10 DAOs of various categories and smart contracts, leveraging on-chain data and interviewing DAO members. Specifically, we define metrics to characterize key aspects of DAOs, such as the degrees of decentralization and autonomy. We observed some DAOs having poor decentralization in voting, while decentralization has improved over time for one-person-one-vote DAOs. Lastly, we offer a set of design implications for future DAOs based on our findings.