On October 11th, Conflux co-founder Forgiven commented on Ethena Labs' USDe, stating that USDe is essentially a wealth management certificate, not a stablecoin. Other users pointed out that USDe is a hedge fund product, albeit one with a built-in rebase mechanism that permanently pegs NAV to $1. The "USDe is a stablecoin" narrative is a major misalignment in the marketing narrative, a deliberate attempt to expand its use cases, such as payments, USD trading pairs, and margin trading. However, the reality is that USDe is a radical financial product innovation.
Vida, founder of Formula News, suggested that the source of this massive margin call may be the forced liquidation of USDe arbitrageurs' revolving loan positions, which reduced the collateralization capacity of USDe as collateral for unified accounts and triggered forced liquidation of positions for market makers using USDe as margin. Ethena subsequently released a reserve certificate to address market concerns, stating that USDe still had approximately $66 million in overcollateralization.
