Man Younger, the founding father of Ethena Labs, acknowledged that the current value drop of the USDe stablecoin on Binance
$19.49B
was not brought on by flaws within the token or its underlying reserves.
As a substitute, he pointed to the way in which Binance dealt with value information throughout a broader market selloff.
In accordance with Younger, the system used to create and redeem USDe labored as meant all through the occasion. Over a 24-hour interval, customers exchanged round $2 billion value of USDe on platforms like Uniswap
$426.34M
, Curve, and Fluid.
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He defined that the primary difficulty was that Binance used its personal buying and selling information to find out USDe’s value. On the time, Binance’s order e book for USDe had restricted liquidity, which led to a value drop than on different platforms.
Younger mentioned this strategy prompted the value on Binance to fall to $0.65, whereas elsewhere, USDe stayed nearer to its anticipated worth.
He additionally famous that Binance had restrictions on deposits and withdrawals throughout the occasion, which prevented merchants from correcting the value distinction.
In the meantime, a dealer generally known as ElonTrades recommended that Binance’s “Unified Account” characteristic performed a task. This method allowed merchants to make use of USDe as collateral and was based mostly on Binance’s inside value information.
Since Binance had not but switched to utilizing exterior value sources, a change deliberate for October 14, attackers could have used this hole to their benefit. ElonTrades claimed that as much as $90 million in USDe was bought on Binance to drive down its value.
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