$19 billion later.. now is a good time to appreciate the difference between market value and par value. In March 2023, the market learned the importance of par value. That's because the federal reserve was raising rates so quickly that US treasuries began to lose market value. In turn, this caused banks to realize significant losses on their books. This spawned bank runs as depositors realized the asset backing their deposits might lead to the bank being unable to meet depositor withdrawals since treasury liquidity was drying up. The Fed, Treasury, and FDIC went ahead and setup liquidity facilities to ensure treasuries were valued at par value -> $1 bond matures at $1, and does not need to be priced at market value. This calmed the markets and pacified the panic. Crypto is unique in that wrapped assets can verifiably show adequate collateral even in times of stress. These aren't debt instruments with maturity, but assets that have clear backing. One stETH can be verified to be backed by one ETH staked to Ethereum. This gives it a 1:1 par value. We can nit-pick on withdrawal queues and wait times, but that is a time value discussion. Now, WBETH has a par value based upon the assets it represents. Yet we saw on Oct 10 that market value preceded par value, creating substantial loses for the market. This was an unnecessary dislocation. And suggests possible iteration on oracle and exchange design that can create par value relative to the underlying assets. Especially when viewed as collateral - which is the main point being made. We see early progress on this front being used on DeFi with fixed pegs, and its why DeFi showed resiliency while poor collateral pricing methods on CEXs proved ineffective. There are situations where par value is preferred over market value because as seen... In an ecosystem with a growing number of wrapped/derivative assets that lack robust liquidity across all exchanges and venues, there exists the opportunity for price manipulation at the expense of collateral. Oracle design improves the quality of collateral. Good pricing creates better assets. And better assets attract capital. As the ecosystem diversifies and money markets mature, these designs will become hardened in time. Pristine and quality collateral with sound pricing mechanisms lays the foundation for well functioning markets across the board.