Explanations of USDe ‘depeg’ on Binance focus on coordinated attack, oracles

Ethena founder Guy Young said the USDe depegging event on Binance that sent the token to $0.65 was an isolated issue not tied to fundamentals.

The USDe synthetic dollar depegged on the Binance crypto exchange due to an internal oracle issue and not because of the underlying collateral, the Ethena protocol, or the token itself, according to Guy Young, the founder of Ethena Labs, the creator of USDe.

USDe minting and redeeming worked “perfectly” during Friday’s flash crash, he claimed; $2 billion in USDe was redeemed during 24 hours across crypto exchanges, including Curve, Fluid, and Uniswap, with minimal price deviations of 30 basis points (BPS) or less, Young said.

The price of USDe fell from about $1 to $0.65 on Binance during the crash because the exchange was using oracle data from its own orderbook, which had thinner liquidity, rather than an external price feed, Young said. He added:

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