Hard peg意思

"Hard peg" is a term used in the context of cryptocurrency and blockchain technology. It refers to a system where one cryptocurrency is permanently and unconditionally tied to the value of another currency, typically a fiat currency like the US dollar.

A hard peg is designed to maintain a fixed exchange rate between the two currencies, meaning that the value of one unit of the cryptocurrency is always equal to a specific amount of the other currency. This is different from a soft peg, where the exchange rate is more flexible and can fluctuate within a certain range.

For example, a cryptocurrency that is hard-pegged to the US dollar might have a fixed exchange rate of 1 token = $1. This means that regardless of market conditions or demand for the cryptocurrency, the issuing entity (usually a blockchain protocol or a consortium) will ensure that the value of the token remains at $1 by buying or selling the token as needed to maintain the peg.

Hard pegs are often used in stablecoins, which are cryptocurrencies that aim to provide stability and reduce volatility compared to other cryptocurrencies like Bitcoin or Ethereum. Stablecoins with a hard peg are attractive to investors and users who want the benefits of blockchain technology (such as fast and secure transactions) without the price volatility of traditional cryptocurrencies.