# kaal:claim:3782216-028

**Claim.** The lesson of the Soros attack is that when a cryptocurrency is pegged above its true market value, the difference must be fully backed by a foreign reserve of collateral, or financiers can profit by breaking the peg.

**Type.** mechanism  **Support.** argued

**Holds when.**

- pegged currencies, including algorithmic stablecoins

**Source quote.**

> The lesson of the Soros attack, is that if the value of a cryptocurrency is pegged at a value higher than its true market value, the difference must be backed c::% by a foreign reserve of collateral holdings.

**From.** Craig Calcaterra, Wulf A. Kaal, *Decentralized Finance (DeFi)* (2021), Basic Design

**Cite as.** Craig Calcaterra, Wulf A. Kaal, Decentralized Finance (DeFi) (2021). SSRN: https://ssrn.com/abstract=3782216

**Verify.** sha256 of source PDF `f1739743aa06bbc1641cd65da790d531b69d8628ea3f5cc3fcad1bf5a1242373` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Calcaterra%20and%20Kaal%20-%202021%20-%20Decentralized%20Finance%20%28DeFi%29.pdf

**Failure mode.** Soros attack on the peg  (family: valuation-and-pricing-failure)

**Topics.** tokenomics, consensus-and-security

**Keywords.** stablecoins, soros-attack, peg, collateral, arbitrage

**Related claims.**

- restates: https://wulfkaal.github.io/claims/3396522-009
- extends: https://wulfkaal.github.io/claims/3402701-022

**Canonical form.** This markdown file is the canonical hashed representation of the claim. Its sha256 is the content hash used for attestation.