During the market sell-off on October 10-11, 2025, the synthetic dollar token USDe experienced a significant price drop. On Binance, the asset fell to $0.65, while on Bybit, it reached approximately $0.92. In contrast, decentralized platforms like Curve, Uniswap, and Fluid maintained stability with price deviations remaining under 0.3%.
Ethena Labs identified issues with Binance's internal orderbook and restrictions on deposits and withdrawals as the primary causes for the price dislocation. These operational constraints prevented arbitrageurs from balancing the price. Despite the volatility, the protocol's mint and redeem functions processed over $2 billion in redemptions within 24 hours.
At the time of the incident, the total supply of USDe exceeded $12 billion, having previously peaked near or above $14 billion. Following the event, Ethena published an emergency Proof of Reserves report, confirming that the protocol remained overcollateralized by approximately $66 million.
The broader market downturn triggered approximately $19 billion in liquidations across the crypto sector. While the underlying Ethena protocol continued to function, users holding USDe on Binance faced liquidations due to the price drop on that specific exchange.
