Mild depegging protection.

I store most of my net worth in stables and other pegged¹ assets, and one risk I think isn’t taken seriously enough in pegged assets is the risk that a company can simply be fraudulent. Algorithmic stables get rightful concern about their design risk, but nobody really takes the counterparty risk of USDt because tether gets regular attestations except a lot can happen in three months. Tether claims it holds (x) quantity of dollars or gold that it mints into USDt or XAUt, but that’s only verified once a quarter, and an attestation isn’t a full audit anyway - it’s a snapshot that confirms the numbers matched on a single day, not that the reserves weren’t borrowed, reallocated or misrepresented for the other 89 days. If Tether gets hacked, robbed or turns out to be fraudulent, the underlying asset depegs and the token depegs.

The way I control for this is bi-directional swap orders. On a service like cowswap you set up a limit order that executes if 1 USDt = 0.95 USDc. The value won’t be a clean 1:1 because some is lost in the swap, but a 5% gap between two assets pegged to the same thing shouldn’t normally happen, so if that order fills it’s a decent signal that USDt has wobbled and you’ve capped your loss at maybe 5–10% instead of riding it to zero. It fires automatically whether you’re awake or asleep, online or off. You should cover the other end too (1 USDc = 0.95 USDt) so you’re protected from both directions - and you can do this with any two assets tracking the same thing, i.e. XAUt/PAXG for gold, WBTC/cBTC for bitcoin, etc.

Now this will not work perfectly and you should enable partial fufillment of the order but it’s cost (effort/financial) to it’s level of protection is in my view quite strong.