This crash is similar to the Luna debacle in that both happened when major exchanges started accepting non-fiat stablecoins as high-LTV collateral, causing risks to penetrate across exchanges. Back then it was UST, now it’s USDe. The combination of 'stability' + high collateral rates fooled most people. Introducing non-fiat stable assets as collateral usually involves two approaches: 1. Allowing high collateral rates (90%+), but setting deposit/loan limits and hard price anchors (e.g., 1, or pegged to USDT/USDC prices). This is the common practice in DeFi lending protocols. However, this approach can backfire, as seen with UST’s collapse and depegging to zero, leaving the protocol to absorb all the bad debt. 2. Using market prices (liquidity risk) as the feed price, but setting lower collateral rates (50-70%), treating them as volatile assets. The worst combination is using market price feeds while allowing high collateral rates. Coupled with the fact that CEXs don’t have fully open arbitrage environments, leading to low arbitrage efficiency, risks are further amplified. LSD-type assets face similar issues. These assets are essentially volatile assets disguised under the cloak of 'stability.'