Plain-English definition
Peg stress is the normalized distance between the market price and the instrument's intended reference. A fixed USD token can be compared with one dollar, a non-USD token needs an FX reference, and an accumulating-NAV or rebasing unit needs a different valuation method.
A small wobble can be normal market plumbing. A persistent or large gap, especially on heavy supply, is the market asking whether redemption, backing, or liquidity is weaker than the promise.
Why it matters
Peg Stress matters because crypto markets can look precise while still being shallow, crowded, or poorly sourced. A useful read is not just the number. It is the number, the size behind it, the context around it, and the part it cannot explain.
Simple example
A simple Peg Stress example is a reader comparing two venues with the same headline price but different depth. The deeper venue can absorb more capital before the trade, peg, or yield reading starts to move against the user.
How Bathymark uses this term
Bathymark uses Peg Stress to translate open market data into live liquidity readings. When the term touches a live page, the reading links back to the relevant chain, protocol, stablecoin, DEX, perps, or Signal so the source remains checkable.
Common mistake
The common mistake is treating Peg Stress as a complete signal by itself. Bathymark treats it as one instrument: useful when read beside liquidity, source, size, and what the number cannot prove.