Crypto Market: Did Ethena's USDe Cause the October Crash?

Crypto Incident and Claims

Four months later, the cryptocurrency sector is still debating the reasons behind the record crash on October 10th. Leading figures are divided over whether this turmoil was caused by structural flaws in certain products or broader market stress.

OKX CEO Star Xu's View

OKX CEO Star Xu argues that the severity of the crash was due to leverage cycles built around the yield-bearing USDe token offered by Ethena. Xu suggested that the treatment of this token akin to cash transformed the market shock into a gradual liquidation spiral.

Criticisms and Different Views

On the other hand, critics such as Haseeb Qureshi from Dragonfly and Binance argue that this crash was fundamentally a macro-driven event triggered by excessive leverage. It is stated that the situation worsened under the effect of lost liquidity and mechanical liquidation engines.