Ethena’s USDe: Depegging, Drama, and a Dash of Chaos!

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Ah, dear reader, let us not be alarmed! Guy Young, the esteemed founder of Ethena Labs, has assured us that the recent depegging incident on Binance, where USDe plummeted to a mere $0.65, was but a minor hiccup, nay, a solitary blip on the radar! 🎩🎩

And lo, the market crashed with the force of a thousand elephants, wiping out nearly half a trillion dollars in a single day, with over $19 billion in leveraged positions liquidated. A veritable financial tempest! ⚠️📉

USDe Depeg Was Due To An Oracle Issue

Young, ever the gentleman, clarified that the USDe depeg on Binance was due to an internal oracle issue, not the underlying collateral. He claimed that USDe minting and redeeming worked perfectly during the crash, with traders redeeming $2 billion in USDe from various exchanges. ‘No one would have been liquidated on any money market with oracles referencing the deepest pools of liquidity for USDe globally,’ he declared, with the air of a man who had just won the lottery. 💸

“The severe price discrepancy was isolated to a single venue, which referenced the oracle index on its own orderbook, not the deepest pool of liquidity, and was facing deposit and withdrawal issues during the event, which did not allow market makers to close the loop. No one would have been liquidated on any money market with oracles referencing the deepest pools of liquidity for USDe globally.”

The Disruption On Binance

The drop of USDe caused a panic among the crypto community, with traders believing it had depegged across the market. However, data revealed the crash was confined to Binance, with prices stable on other platforms. Young clarified it was ‘isolated to a single venue,’ highlighting Binance’s deposit and withdrawal issues. ‘A most unfortunate occurrence, but nothing a good cup of tea cannot fix,’ he might have said, if he were a proper Englishman. 🍵

A Coordinated Attack?

Traders speculated if the depegging was a coordinated attack to exploit Binance’s ‘Unified Account’ feature. The feature, which uses Binance’s own order book, was deemed a vulnerability. Binance promised to address it by October 14. ‘A most cunning plan, if I do say so myself,’ one trader might have muttered, while others rolled their eyes. 🤖💸

Traders believe attackers took advantage of this window and dumped up to $90 million in USDe on Binance, lowering its value to $0.65 on the platform, leading to nearly $1 billion in liquidations. The attackers then opened short positions on Bitcoin (BTC) and Ethereum (ETH) on Hyperliquid, minutes before President Trump’s tariff announcement, which sent markets into meltdown. 🚨💥

Binance Paid $283M In Compensation

Binance, ever the gracious host, paid $283 million in compensation to users. Executives apologized, and the exchange compensated futures, margin, and loan users who held USDE, BNSOL, or WBETH as collateral. ‘A most regrettable affair, but we shall make amends!’ they declared, with the sincerity of a man who has just lost his hat. 🧢

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2025-10-15 02:45