TechFlow news, October 11 — Around 5:30 AM today, Ethena's USDe stablecoin experienced severe de-pegging. The USDE/USDT price on Binance dropped as low as $0.65. It has since recovered to normal levels.
Ethena Labs stated that the secondary market price fluctuations of USDe were caused by market volatility and cascading liquidations. Ethena confirmed that USDe minting and redemption are operating normally and assets remain over-collateralized. Due to liquidations causing perpetual contracts to trade below spot prices, Ethena's short positions generated additional unrealized PNL (uPNL), which is being converted into protocol revenue, making USDe more over-collateralized than yesterday.
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