[meltedcapacitor]

The arb without transparency can work as well, as long as you keep enough collateral. At some point the peg becomes a self perpetuating prophecy. Carefully executed, it can last forever.

It could be what Tether does: they lost banking access early on and since then all new USDT seem to "appear" rather than being given to people wiring them dollars on the clear banking system, presumably from arb bots trading crypto vs USDT on the big exchanges to maintain the peg.

As long as they don't lose what the bots bought and the value of that basket is above cost basis (or fully hedged) it's unsinkable.