Star Xu: How Did USDe Leverage Loops Trigger the "1010" Crash? Description: OKX founder and CEO Star Xu Star_OKX questioned Binance's promotion of USDe as a stablecoin on the New Era Finance Podcast New Era Finance Podcast. He argued that USDe, issued by Ethena, is effectively a "tokenized hedge... fund" and that a delta-neutral strategy does not imply zero or low risk. He further noted that Binance allowed users to borrow USDT against USDe, convert it into more USDe, and repeat the loop to increase yields, amplifying leverage and risk exposure along the way. In his view, this setup was a major cause of the cascading liquidations during the "1010" crash and represented a serious risk-control failure.show more

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@star_okx @new_era_finance binance promoting it as stable is the part that gets me tbh

@star_okx @new_era_finance The label did the damage here — calling USDe a stablecoin while users could borrow USDT against it and loop back in turned a delta-neutral strategy into leveraged exposure. The next product that wants the stablecoin label should have to earn it without the loop.

@star_okx @new_era_finance USDe leverage loops being treated as a stablecoin is wild, that's asking for a crash.

@star_okx @new_era_finance Whatever the blame, the user lesson is the same: know whether your "stablecoin" is backed by cash or by a hedged position, and what unwinds first in a crash. Leverage loops on a yield-bearing stable work right up until the yield or the peg moves.

@star_okx @new_era_finance delta-neutral leverage is just slow-motion degen.

@star_okx @new_era_finance This man has no life.

@star_okx @new_era_finance Star Xu 说的其实很直白：USDe 不是稳定币，是披着马甲的对冲基金产品。 最狠的不是产品本身，而是交易所一边给它“稳定币”的定位，一边允许用户用它做循环贷加杠杆。 1010 那波爆仓，这个设计至少要背一半的锅。交易所风控如果连这种基本的杠杆嵌套都拦不住，后面再出问题就别怪用户了。

@star_okx @new_era_finance The key variable isn’t just the ‘stablecoin’ label—it’s recursive collateral. A delta-neutral base can still become highly exposed to funding and liquidity risk once users borrow against it and loop the position.

Binance disputed a video's account of the recent market turmoil, saying it substantially misrepresented the facts. According to Binance's internal review, market prices had already fallen before USDe lost its peg. The exchange also said USDe's price deviation did not affect its broader market risk-control mechanisms. Binance rejected claims that the USDe depeg or its risk controls caused the market turmoil.

@star_okx @new_era_finance Thanks for sharing this!

@star_okx @new_era_finance it is clear binance did this

@star_okx @new_era_finance The loop is a real risk; the blame is misplaced. Leverage multiples are set by Binance's margin haircuts, not by USDe's design. On 1010 the funding flip hurt, but Ethena's insurance fund absorbed it and the peg held within a cent. That is a collateral policy failure wea

@star_okx @new_era_finance 1010就是币安干的！不是某个项目的问题！

@star_okx @new_era_finance Star Xu reframing 10/10 as a synthetic-dollar unwind, not a perps crash, is the sharpest post-mortem take yet. Reserve transparency should be the price of the word 'stable'.

@star_okx @new_era_finance 10-10是BN自己 oracle / pricing model 出问题。不是 USDe Ethena 的问题。那天 Ethena 赎回了2B 完全没卡。但因为 BN 错误显示 USDe 价格为0.65，把很多原本健康的position 也liquidate 了。USDe在其他地方还是1比1的。defi 也没liquidation

@star_okx @new_era_finance Fair debate. Looping leverage on anything sold as a stablecoin is how a bad day turns into a crash.

@star_okx @new_era_finance 总结一下 币安就是毒瘤呀

@star_okx @new_era_finance the loops broke on a local price: USDe printed ~$0.65 on Binance's own book while Curve held ~$1, and positions were marked to that book. Binance moved USDe/wBETH/BNSOL to redemption-rate pricing right after

@star_okx @new_era_finance Leverage loops on a yield asset look stable right up until the collateral gets marked down fast. 10/10 was a liquidity problem that showed up as a price move.

@star_okx @new_era_finance Delta-neutral can look low-risk on paper, but looping the collateral multiplies exposure. Whether USDe is a stablecoin or a yield product may depend on how much leverage sits on top of it.

🥱 cool story, brev.. @star_okx How bout: “it’s actually much simpler than that.” Or, as the common philosophy analogy goes: Don’t leave your keys inside your car, with: the doors open, engine running, and music blaring, in a bad neighborhood… Then walk away and cry alligator tears* that someone took your car… 🫤 ..Ahem.. 😤 Yes, the person was a thief who stole the car. But, you’re also a moron for leaving the car as a de-facto 🎁 for bad actors in this scenario. Lessons. 🪧 ⬆️ *LOL @ “gator tears” 🐊Hyperliquid.💦

@star_okx @new_era_finance 1010真正的雷是合成稳定币当保证金循环加杠杆，平台高息推它就别只怪行情

@star_okx @new_era_finance A loop looks like yield until the peg wobbles. Then every layer has to unwind at the same time. If you can't explain what backs the 'stable,' you're not farming. You're stacking leverage.

@star_okx @new_era_finance one year ago today the 10/10 crash wiped out more leverage than any day crypto has ever had and a year later the two biggest exchanges are still arguing over whose fault it was