Ethena’s USDe Briefly Loses Peg During $19B Crypto Liquidation Cascade
Ethana's stablecoin, USDe, briefly lost its 1:1 dollar peg during a market sell-off triggered by U.S. President Trump's tariff announcement on China.
On Binance, USDe dropped to 65 cents but quickly regained parity amidst the largest ever crypto liquidation event in U.S. dollar value, with more than $19 billion in liquidations over 24 hours.
USDe offers a 5.5% yield and is backed by cryptocurrencies using a basis trade strategy to profit from price gaps between spot and futures markets.
Investors shifted to safe havens like gold and U.S. Treasuries following the announcement.
USDe's dip impacted less actively traded tokens differently, with some recovering swiftly.
Exchanges such as Binance marked prices closer to real-time trading, whereas lending protocols like Aave maintained USDe at $1, mitigating immediate impact.
Ethena Labs confirmed USDe remains over-collateralized, with mint & redeem functionalities operational without downtime.
