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Ethena’s USDe, one of the largest synthetic dollar tokens in crypto, experienced a jarring price dislocation on Binance that saw it trade as low as $0.65 before snapping back toward its $1 peg. On DeFi platforms like Curve and Uniswap, the same token barely budged, with deviations under 0.3%.
What actually happened
During a broad market sell-off on October 10-11, 2025, USDe’s price on Binance cratered far below its intended dollar peg. The token hit roughly $0.65 on Binance and approximately $0.92 on Bybit, while major decentralized exchanges showed almost no stress at all.
The culprit appears to have been a combination of factors unique to Binance. A thin internal orderbook distorted oracle pricing, and issues with deposits and withdrawals on the platform prevented arbitrageurs from doing what they normally do: buy cheap on one venue, redeem at par, and pocket the difference.
Ethena Labs and multiple traders pointed to Binance’s operational setup as the root cause. The protocol’s own mint and redeem functions kept humming along throughout the episode, processing over $2 billion in redemptions within a 24-hour window.
The numbers in context
USDe’s total supply exceeded $12 billion at the time of the incident, having peaked near or above $14 billion due to heavy accumulation driven by prior reward programs on Binance. On Curve, USDe’s price deviation stayed under 0.3%. Uniswap and Fluid showed similar stability.
Ethena responded by publishing an emergency Proof of Reserves report showing the protocol was overcollateralized by approximately $66 million.
The broader market context made things worse. The sell-off triggered approximately $19 billion in liquidations across the crypto market.
Why the venue matters more than the token
When Binance’s USDe orderbook was thin and arbitrage pathways were blocked, the price shown on Binance stopped reflecting USDe’s actual redeemable value. DeFi protocols that rely on oracle feeds aggregated from multiple sources were largely insulated. Protocols that leaned heavily on Binance’s price data were not.
For USDe holders specifically, the protocol itself performed well under pressure, processing billions in redemptions without breaking. Anyone who held USDe on Binance and got liquidated during the flash crash experienced very real losses, regardless of how healthy the underlying protocol was.
Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.
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