Stable Labs – the issuer of the synthetic stablecoin USDX – is facing a serious crisis after the coin lost Peg to the USD. On Thursday morning (US time), the price of USDX fell below $0.60, causing the entire decentralized finance (DeFi) market to shake.
USDX had previously reached a record circulating supply of $683 million, making it one of the fastest-growing stablecoins on European regulatory compliance (MiCA) blockchain platforms. However, the sudden crash has raised concerns among investors about the risk of a contagion to other DeFi protocols such as Lista DAO and PancakeSwap , where USDX is widely used as collateral.
Shortly after USDX plunged, Lista DAO – a popular on-chain lending protocol – said it was “closely monitoring” the situation at MEVCapital USDT Vault and Re7Labs USD1 Vault, where USDX-related collateral assets were being subjected to abnormally high borrowing rates with no sign of repayment.
Meanwhile, PancakeSwap, a Binance-backed DEX, also issued a warning to users: “Please monitor your positions related to USDX vaults. We are working with partners to mitigate risks.”
Investors noted that, in the first few hours after losing the peg, the USDX Staking price briefly jumped to over $1.11, before plummeting to $0.62 – an extremely rare move in the stablecoin space.
Potential Cause: Related to the $128 million Balancer hack
Although Stable Labs has not yet made an official statement, many experts believe that the collapse of USDX's peg may be related to the Balancer attack on November 3, which caused this DeFi protocol to lose more than $128 million.
USDX Capital relied on a delta-neutral hedging strategy to maintain a stable exchange rate, but forced liquidations from BTC/ ETH hedge positions may have caused a domino effect. As money was withdrawn in large amounts to exchange USDX for other stablecoins, the liquidation system became unbalanced, leading to a temporary collapse of USDX.
A researcher at Hyperithm, named Min, commented:
Suspicious Transactions and Questions Surrounding Stable Labs Founder
According to on-chain analysis from the Arabe ₿luechip account on the X network, a wallet believed to be linked to Flex Yang – founder of Stable Labs and Babel Finance – has been swapping large amounts of USDX collateral to other stablecoins such as USDC, USDT , and USD1 (the new stablecoin backed by the Trump administration) on platforms like Euler, Lista, and Silo.
