Ethena's synthetic USDe stablecoin has seen net outflows of approximately $8.3 billion since the major market crash on October 10th, amid a sharp decline in confidence in synthetic collateral and leverage models.
According to a report by 10x Research, the October sell-off was a turning point for the crypto market, ending the uptrend and ushering in a delevering phase. This crash wiped out approximately $1.3 trillion in market value, equivalent to nearly 30% of the total market Capital at the time.
USDe – a stablecoin not backed by fiat currency but relying on a synthetic collateral and hedging mechanism – suffered a “serious shock of distrust” in this context, analysts said.
Data from CoinMarketCap shows that USDe's market Capital reached nearly $14.7 billion on October 9th, but just over two months later it had fallen to around $6.4 billion.
Immediately after the crash on October 10th, USDe lost its price Peg and fell to around $0.65 on Binance. However, Ethena Labs founder Guy Young stated that this incident stemmed from an internal oracle error on the exchange, not from issues with collateral, the protocol, or the USDe exchange mechanism.
He also affirmed that Mint and redeeming USDe continued to function normally during periods of high market volatility, with approximately $2 billion withdrawn within 24 hours on major DeFi platforms, and only minor price discrepancies observed elsewhere.
The crash on October 10th is XEM the largest liquidation event in the history of the crypto market, with over $19 billion in positions liquidated and open interest reduced by approximately $65 billion.
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The article "Ethena's USDe 'Evaporates' $8.3 Billion After October Crash" first appeared on CoinMoi .
