What if a stablecoin depeg cascades through perp-margin collateral?
A stablecoin used as perp margin depegging is the dangerous reflexive loop: collateral marks down, positions liquidate, ADL fires, and ETH (-6.5%) leads because DeFi/perp leverage concentrates there; BTC is hit via exchange contagion. This is the UST/May-2022 collateral-spiral template, where a margin asset losing par cascaded across venues. Key forward risk vs 2022: far more size now sits in centralized perp venues, so the liquidation transmission is faster and harder to halt.
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 0–6 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 stablecoin depeg cascades into perp markets where it serves as margin collateral, triggering mass liquidations and ADL events. The trigger decomposes into signed root‑shocks — Crypto confidence ▼ · Crypto liquidity ▼ — which propagate through our causal graph to the markets below.