Li Shuo | 1011 Two-Month Memorial
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Li Shuo | 1011 Two-Month Memorial
In this market, retail investors' lives are not lives. They are selfless contributors of liquidity.
Navigating Web3 tides with focused insightsTime flies—today is December 12th. No individual or institution has been held accountable for this disaster. This place remains an unregulated, dark market where the big fish devour everything.
Instead, the world's largest crypto exchange chartered planes and hosted a lavish party, bringing in every visible KOL from the market. The scene was filled with deafening gongs and drums, yellow banners waving, motivational speeches, endless photo ops flooding screens, guests showering extravagant praise, expressing their honor and reverence—not to a deity, but to an emperor. Some might as well have castrated themselves on the spot just to serve by his side.
How ironic. Everyone knows that no snowflake in an avalanche feels responsible, yet so many still willingly become dogs, thinking that being the master’s dog means they won’t get slaughtered.
Let’s revisit what happened on October 11. The external trigger was Trump’s announcement of 100% tariffs on China—an event akin to the assassination of Archduke Ferdinand. Then came the usual internal structural issues within the crypto market: average leverage rates at major exchanges had surpassed historical highs. A massive amount of speculative capital entered via high-leverage contracts, making the market structure extremely fragile.
But the de-pegging of USDe was the nuclear weapon that caused the crash. A certain exchange actively promoted this stablecoin and repeatedly launched high-yield products tied to USDe. Despite inherent design flaws and potential liquidity risks, algorithmic stablecoins like this became, under the exchange’s endorsement, widely used as collateral for contracts and recursive borrowing.
High leverage combined with de-pegging triggered cascading cross-margin liquidations. The crash occurred during Friday evening in the U.S. and early Saturday morning in Asia—market makers were caught off guard, and liquidity instantly dried up. Meanwhile, market makers, with limited capital, prioritized protecting leading projects amid panic, causing numerous altcoins to lose buying support and suffer “flash crashes” or even 50% plunges. Over $19 billion in positions were liquidated in a single day, wiping out more than 1.6 million investors.
Beyond retail traders, market makers also suffered heavy losses. Below is an article from Wu Shuo interviewing market makers, detailing the systemic issues they faced on October 11. (Thanks to Wu Shuo for granting permission to quote)
Firsthand Account of the October 11 Tragedy
Afterward, exchanges did everything to portray themselves as innocent victims, attempting to downplay this man-made disaster as routine leveraged liquidation. They claimed distributing “compensation funds” was a responsible act. This isn’t slapping someone then giving them a treat—it’s burying them alive and then burning some paper money afterward.
On October 11, many assets vanished into thin air—not transferred, but erased. In a disaster of this scale, no trader wins. The only beneficiary was the exchange. Yet the instigators feel no guilt, merely mumbling about their darkest nights and sleepless days.
Blogger Benson Sun (X@BensonTWN) wrote this on social media:
"If, after a major incident in an industry, there’s only PR and no reflection, only celebration and no introspection, only applause and no accountability, then this ‘fire’ will never go out. It will simply reignite at another time, in another place, burning the next group of faithful but defenseless believers. And we survivors? We’re just ashes waiting our turn."
In this market, retail investors' lives are not lives—they are无私 contributors of liquidity. Crypto history now accumulates more and more tragic anniversaries like March 12 and May 19. October 11 is one of them. Survivors cannot afford to adopt a mindset of “the dead are gone, let it be.” When disaster strikes you tomorrow, who will speak up for you?
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