What a peg is

A Solana token that follows one asset from another chain.

A peg is an SPL token on Solana that follows the price of one asset on another chain. Nobody holds the original PEPE or NVDA for it; it follows the asset's price, and that is all it needs to do.

Supply

Every peg has 1,000,000,000 tokens with 6 decimals. When a peg is created:

1. The whole supply moves into an account owned by the Peg program.
2. The mint authority is revoked, so no more can ever be minted. There is no freeze authority.
3. The program checks both facts before it registers the peg, and refuses a peg that does not meet them.

Its pool

Each peg trades against SOL in a Meteora DLMM pool. The program owns the pool position: peg tokens sit in the price bins above the current price and the SOL that buyers paid in sits in the bins below. A buyer takes peg tokens from the bins above; a seller takes SOL from the bins below.

Following the price

When the asset's price moves, the program moves the whole position to the new price in one transaction. See Depth and repricing for how, and The Peg program for the rules it enforces.