According to Ethena Labs founder, Guy Young, the temporary dip in the USDe stablecoin’s value on
$17.79B
exchange wasn’t a result of problems with the token itself or its reserves.
Instead, Young attributes the fluctuation to how Binance processed pricing information during a widespread market downturn.
Young explained that the mechanisms for creating and redeeming USDe functioned as designed. Data reveals users traded roughly $2 billion worth of USDe on decentralized exchanges such as Uniswap
$383.44M
, Curve, and Fluid within a 24-hour span.
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His explanation centers on Binance’s reliance on its internal trading data to calculate USDe’s value. The USDe order book showed low buying and selling activity on Binance at the time, contributing to a price drop exceeding that on other platforms.
Young pointed out that Binance’s valuation of USDe fell to $0.65, while elsewhere it held closer to its intended peg.
He further mentioned that Binance restricted both deposits and withdrawals while this was happening, preventing arbitrage traders from correcting price differences immediately.
Separately, trader ElonTrades posited that Binance’s “Unified Account” system may have played a contributing factor. This system permitted users to utilize USDe as collateral, informed by Binance’s own price feeds.
As Binance hadn’t transitioned to external price data as a reference point (a change expected on October 14th), ElonTrades suggests attackers may have exploited this vulnerability. Reportedly, around $90 million worth of USDe was offloaded on Binance, contributing to a price decrease.
Plasma’s head, Paul Faecks, recently responded to community worries regarding the dramatic 50% price drop in their digital asset, XPL. Want to know what he said? Continue reading the full story here.