What happens if USDC depegs from $1?

In the event that USDC depegs from its $1 value on Derive, there are specific mechanisms in place to address the potential impact on the platform's margin requirements. The key mechanism is the 'Depeg Contingency,' which is an additional margin conditionally required to protect against the depegging of USDC. Here's how it works:

By incorporating the 'Depeg Contingency' into its margin system, Derive aims to mitigate the risks associated with the depegging of USDC, thereby protecting the platform and its users from potential adverse effects.

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