When the name of a "stablecoin" is associated with "overnight crash," the nerves of the crypto market instantly tighten. Early Saturday morning Beijing time, a sudden series of cryptocurrency liquidations thrust the world's third-largest stablecoin, USDe, into the spotlight. This "synthetic dollar" stablecoin launched by the Ethena Labs team plummeted to a low of $0.65 within just half an hour, drawing the attention of global financial markets. Following this, up to $19 billion in cryptocurrency long positions were liquidated, affecting over 1.6 million account addresses. This shocking "bloodbath" not only raised significant doubts among investors about the "stability" of USDe but also profoundly revealed the fatal vulnerabilities of high-leverage strategies and complex synthetic assets in a highly volatile market.
I. The Unraveling of USDe: A $19 Billion "Bloodbath"
The severe turbulence in the crypto market began early Saturday morning and quickly escalated into a large-scale liquidation event.
Price Flash Crash: Starting around 5:20 AM on Saturday, the spot price of USDe on a well-known exchange suddenly decoupled, dropping to a low of $0.65 within the next half hour. The turmoil lasted nearly two hours, during which various mainstream wrapped tokens also plummeted, collectively resulting in a historic level of liquidations in the crypto space.
Massive Liquidation: According to CoinGlass data, nearly $19 billion in cryptocurrency long positions were liquidated in the past 24 hours, with over 1.6 million account addresses facing forced liquidation. This figure is shocking and highlights the brutality of the market's chain reaction.
Trigger: Investigations suggest that the event was triggered by a large institution's cross-margin portfolio liquidation. When the market faced massive liquidations, the selling pressure acted like a domino effect, pushing tokens that were originally closely tied to the dollar or spot prices away from their peg. USDe was the first to be affected, followed by BNSOL and WBETH, with concentrated liquidations further amplifying the volatility, creating a vicious cycle in a short period. When the token price hit the liquidation line, the exchange's system would directly enforce forced liquidations, further driving down the price.
II. The Mystery of USDe's "Synthetic Dollar": The Fragility Behind High Returns
As the world's third-largest stablecoin, USDe has a market capitalization exceeding $12 billion, but its design mechanism is fundamentally different from traditional stablecoins, which is precisely what exposes it to fatal vulnerabilities in a highly volatile market.
Unique Synthetic Mechanism: Unlike stablecoins like USDT, which are backed by fiat currency or hard assets like US dollars and gold, USDe is not directly backed by physical assets but is a "synthetic dollar" launched by the Ethena Labs team. It allows users to mint USDe by collateralizing crypto assets (such as Bitcoin, Ethereum, and liquid staking tokens), while the project team establishes corresponding short positions in the derivatives market to hedge against the price risk of the collateral. Ideally, this is designed as a "Delta-neutral" portfolio, maintaining the synthetic dollar value of USDe regardless of fluctuations in the underlying asset prices.
High Yield Temptation: USDe's rapid rise to popularity is due to its mechanism design that allows the stablecoin to generate returns. During bull markets in the crypto space, perpetual contract long positions pay fees to short sellers. Meanwhile, some cryptocurrencies can also generate staking yields. This "high yield" characteristic attracted a large number of investors seeking arbitrage and leverage.
Amplified Risks of "USDe Circular Loans": In the crypto space, where risk control mechanisms are not well established, such assets have developed a dangerous "USDe circular loan" strategy. Speculators collateralize USDe to borrow other stablecoins, mint more USDe, and then repeat the cycle, infinitely amplifying leverage. The problem arises when the market faces strong selling pressure, like on Saturday, where USDe became the focal point of the liquidation event. As the cryptocurrency market collectively declined, the hourly funding rate for Ethereum dropped to its lowest level since the Bank of Japan's interest rate hike shock in 2024. With large whale users and institutions using USDe as collateral facing liquidation, a significant amount of USDe was sold off, triggering the price to decouple. At this point, users who had maximized leverage through "USDe circular loans" faced catastrophic losses. As smart contracts automatically enforced liquidations, more USDe was sold off, creating a vicious cycle.
III. Exchanges' Emergency Stop-Loss: Compensation, Upgrades, and He Yi's "Crisis Management"
After the USDe decoupling event, the involved exchange (Binance) quickly took action to mitigate user losses and upgrade risk control mechanisms.
Compensation Plan: Binance announced in a statement that it would compensate users who were liquidated due to the decoupling and held USDE, BNSOL, and WBETH as collateral for contracts, leverage, and borrowing. The calculation method would consider the price difference between the market price at 08:00 on October 11 and the liquidation price, plus liquidation fees, to avoid extreme points affecting the compensation. Compensation is expected to be completed within 72 hours. Binance emphasized that losses purely due to market fluctuations or unrealized profits are not covered by the compensation.
Risk Control Upgrades: Binance also announced three new safeguards to prevent such events from happening again:
- Incorporating the redemption price into the index weight of BNSOL, WBETH, and USDE.
- Setting a minimum price limit for USDE, similar to traditional market circuit breaker mechanisms.
- Increasing the frequency of risk control parameter reviews.
He Yi's "Crisis Management": Binance co-founder He Yi posted two messages on the X platform, apologizing to the community and explaining the situation. She promised compensation for losses caused by platform issues but reiterated that losses due to market fluctuations would not be compensated. However, Binance customer service, in communication with users, stated that "the value of altcoins was originally zero," attempting to explain the lack of compensation for market fluctuation losses. This statement ignited community outrage, as it was perceived as lacking empathy and professionalism. He Yi also emphasized that Binance had employed intern customer service representatives, and the customer service team used translation tools, which may have led to communication issues.
IV. Market Insights: A Reevaluation of the Nature and Risks of Stablecoins
The USDe decoupling event has once again prompted a profound reflection on the nature and risks of stablecoins in the market.
Definition of "Stability": Why can a product packaged as a "stablecoin" be so unstable? This has led the market to reevaluate the definition of "stablecoin," especially the risk exposure of synthetic stablecoins.
High Volatility and High Leverage: The inherent high volatility of the crypto market and the widespread use of high-leverage strategies in DeFi mean that even well-designed stablecoins can face shocks under extreme market conditions.
Platform Responsibility and Investor Self-Discipline: Through compensation and upgrades, Binance attempts to submit a "stop-loss report." However, for investors, leverage is always a double-edged sword. The decoupling event serves as a reminder that even if exchanges can bear some responsibility, excessive borrowing will still amplify losses in rapidly fluctuating markets. In a crypto market without circuit breakers or price limits, maintaining position flexibility and risk reserve space is the last line of defense for personal asset safety.
"Black Swan" Events: In the current market environment, no one can predict when the next "black swan event" will occur or how USDe will perform in the next storm. The project team, Ethena Labs, emphasized after the incident that USDe remains over-collateralized, and the mechanisms for minting and redeeming have not encountered issues.
Conclusion:
The brief decoupling event of USDe represents a significant test faced by the cryptocurrency market recently. It not only reveals the potential vulnerabilities of "synthetic dollar" stablecoins in highly volatile markets but also warns of the devastating consequences that high-leverage "circular loan" strategies in DeFi may bring. Although the exchange quickly implemented compensation and risk control upgrades, this "bloodbath" serves as a reminder to all market participants: while pursuing high returns, one must fully recognize the inherent risks of the crypto market. The essence of stablecoins, the risks of leverage, and the responsibilities of platforms and investors will all be reevaluated in light of this event.
Related Reading: The new stablecoin XSGD has landed on exchanges, challenging the dollar's hegemony in Singapore.
Original: “What Happened When the World's Third-Largest Stablecoin USDe Decoupled, Sparking Panic?”
免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。
