What if a leading dollar stablecoin slips to a lasting discount?
A major dollar stablecoin holding a persistent discount drains liquidity from tokenized-asset and prediction markets — the trade is system-wide crypto deleveraging (ETH/SOL/BTC down hard, MSTR/COIN levered proxies worse) as the settlement asset itself is suspect. Direct rhyme: UST/Terra (May-2022) and USDC's brief SVB depeg (Mar-2023), which froze on-chain liquidity until confidence returned. Forward angle: a discount in a top fiat-backed coin (vs. an algo coin) implies real reserve/redemption doubt, so the stress is harder to arbitrage away and bleeds into every market that uses it as cash. Roots are apt.
Every number ships with its receipt — the odds, the range, the precedents, and a public grade at Reality Check. The statistical machinery that produces it is proprietary.
The butterfly cascade
How this trigger trickles across markets, left → right — the root shock, its first‑order moves, then the ripple effects. Drag any node; tap a market for its real price history.
Resolution timeline — how this probability is moving
Our model's odds (electric blue) over time vs the market's (Polymarket, amber), from the past toward the 6–18 months horizon. Each dot is a real macro event that nudged the probability — green pushed it up, red pushed it down. Tap a dot for the source. Loading the probability audit trail…
What it would mean
If this plays out, it is a mixed shock. A leading dollar stablecoin trades to a persistent discount, draining liquidity from tokenized-asset and prediction markets. The trigger decomposes into signed root‑shocks — Crypto confidence ▼ · Crypto liquidity ▼ — which propagate through our causal graph to the markets below.