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Stable-stable pools look like the safest thing in DeFi: two dollar-pegged assets, a hair-thin range, steady emissions. That calm is real — right up until one side loses its peg, at which point a stable pool becomes one of the worst places to be standing.

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Why depegs hit LPs so hard

When a stable depegs, liquidity providers are the buyers of last resort: the pool mechanically absorbs the failing asset as everyone else sells it. A tight range makes this worse — the position converts entirely into the depegging asset almost immediately. And the “yield” printed during a depeg is compensation for exactly that risk, which is why chasing it is a trap.

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How Dionysus treats stables

  • Each stable is judged against its own anchor. A euro stable is measured against the euro, not blindly against $1. Deviation is measured from what the asset should be worth.
  • Depeg response is asymmetric and safety-first. The system watches peg deviation, and its posture during stress is to stop treating the pool as safe — halting normal compounding into a deteriorating pair rather than harvesting a doomed premium. The specific thresholds and responses are closed source.
  • Stables pass the same universe screen as everything else. Depth, feed quality, and issuer credibility gate admission; being called “stable” earns nothing.

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What we can’t protect you from

A hard, permanent depeg of an asset your vault holds is a market loss like any other — see delta. If the pegged asset never recovers, no exit logic can retrieve value that no longer exists. Bluechip’s stable exposure is limited to high-quality issuers precisely because this tail cannot be engineered away.