Ethena’s USDe Peg Intact Despite Binance’s Technical Issues
During a recent market sell-off, Ethena's synthetic dollar, USDe, briefly fell to 65 cents on Binance but remained stable elsewhere.
- The price drop was isolated to Binance due to its lack of direct dealer relationships and reliance on its own illiquid order book for price references.
- Decentralized platforms like Fluid, Curve, and Uniswap maintained USDe's stability, with price deviations less than 100 basis points.
- Binance's infrastructure failed to support peg arbitrage during volatility, leading to exaggerated price drops in USDe.
- Guy Young, founder of Ethena Labs, clarified that the issue was exclusive to Binance and not indicative of a global depeg.
- USDe's redemption mechanism demonstrated resilience, maintaining overcollateralization by approximately $66 million.
Overall, USDe's peg remained intact where liquidity was ample, highlighting Binance's technical issues as the cause of the temporary price dislocation.