Another stablecoin, USDX, has "gone off-penetration," triggering a crisis of confidence in stablecoins.

Amidst an already volatile cryptocurrency market, another stablecoin has encountered a crisis of confidence. The synthetic stablecoin USDX, issued by Stable Labs, deviated significantly from its $1 peg last Thursday, triggering concerns about a ripple effect on related decentralized finance (DeFi) protocols. Following the plunge in USDX's price, several mainstream DeFi protocols have acted swiftly. Lending protocol Lista DAO and Binance-backed decentralized exchange PancakeSwap have both issued statements indicating they are closely monitoring the situation. Lista DAO has initiated an emergency governance vote, seeking authorization to forcibly liquidate related assets to control risk exposure. Lista DAO noted that borrowing rates on its platform have surged for major borrowers associated with Stable Labs, but no repayment activity has materialized. In response to the crisis, the protocol has executed liquidations via flash loans, recovering over 2.9 million USD1 tokens in an attempt to defuse this "time bomb" before the crisis spreads. As of now, Stable Labs, the issuer of USDX, has not commented on the matter. According to The Block's price page, although the price of USDX briefly surged above $1.11, it has fallen to around $0.113 as of press time, and market panic continues to escalate. Chain Reaction and Emergency Liquidation The USDX de-pegging event has triggered high alert in the DeFi community, and relevant protocols have quickly activated contingency plans. On November 6th, Lista DAO initiated an emergency governance vote, LIP 022, seeking community authorization to force a liquidation of the USDX market involving vaults managed by MEV Capital and Re7 Labs. Prior to initiating the vote, Lista DAO had already executed a flash loan to liquidate over 3.5 million USDX and recovered over 2.9 million USD1 tokens. The vote, conducted via the Snapshot platform, ended on November 9th. As of press time, all veLISTA token holders who participated in the vote voted in favor. Lista DAO stated that this action aims to "minimize potential losses and maintain a healthy market environment across the entire ecosystem." Meanwhile, decentralized exchange PancakeSwap also issued a reminder to users: "Our team has also noticed the situation involving the affected vaults and is monitoring it closely. Please check and monitor your positions on PancakeSwap involving these vaults." Wall Street News compiled a UTC timeline of the event on November 6th: 9:23: Lista DAO announced it is monitoring the situation where borrowing rates in MEV Capital's USDT vault and Re7 Labs' USD1 vault have surged to 800%. The DAO stated that the main borrower (related to Stables Labs) has not made any repayments, and the collateral used was $sUSDX and $USDX. Lista called on the two institutional vault managers to take responsibility and make a public statement as soon as possible to protect user assets. 10:55: Re7 Labs proposed a solution in the Lista DAO's Discord channel, planning a forced liquidation. Lista DAO stated that it has received the statement and will soon initiate a governance vote to begin the liquidation process. 11:08: PancakeSwap stated that it is monitoring the situation and advised users to check their holdings in the relevant liquidity pools. 11:15: Lista DAO, at the request of Re7 Labs' vault management, formally initiated an emergency governance vote (LIP-022). The proposal is to adjust the oracle price of USDX, triggering public liquidation of affected positions based on the size of outstanding loans. 11:50: MEV Capital acknowledged an abnormally high lending rate in its USDT/sUSDX market and took countermeasures, including setting the position cap to 0 and updating the interest rate model. The collateral involved carries similar risks to the xUSD-type collateral assets involved in the previous $93 million loss at Stream Finance. Follow-up: The outcome of this emergency vote will determine whether Lista DAO will implement oracle price coverage and forced liquidation. The proposal explicitly states that if abnormal liquidity is detected in the USDX market during the voting period, the DAO may intervene in advance without waiting for the voting to end. Behind the "De-anchoring": Possible Triggers and Doubts Regarding the specific reasons for USDX's de-anchoring, the market remains undecided, but several speculations have surfaced. One possible explanation is that this incident may be related to the $128 million Balancer theft that occurred on November 3rd. This incident may have led to the forced liquidation of Stable Labs' short positions in Bitcoin and Ethereum used for hedging, triggering a surge in USDX redemptions and ultimately causing its price to fall. Meanwhile, on-chain activities have also raised further questions. A trader using the pseudonym Arabe ₿luechip stated on the X platform that a wallet associated with Flex Yang, founder of Stable Labs and Babel Finance, began lending out mainstream stablecoins such as USDC and USDT using USDX as collateral on protocols like Euler, Lista, and Silo earlier this week. Arabe ₿luechip wrote: "All USDC/USD1/USDT liquidity in the Euler, Lista, and Silo protocols appears to have been exhausted by using sUSDX/USDX as collateral. Borrowers are paying 100% interest but seem to have no intention of repaying." Min, a researcher at digital asset management company Hyperithm, also raised questions. He pointed out that USDX's "portfolio hasn't changed in over two months," and questioned: "Are they really doing any active management?" Netizens have commented on this incident. User BitMania tweeted: "I was watching the market at dawn, and USDX went to zero overnight. All my efforts were in vain. This is the risk of decentralization." ChainBreaker commented: "You can't be lazy with smart contracts. This USDX incident is a bloody lesson." On Reddit, someone bluntly stated, "Contract upgrades are not child's play; too many people's assets have been destroyed." Someone else claimed in a Telegram group, "We have already contacted three law firms and will launch a joint lawsuit against the project team." Some people lamented: "The blockchain dream has been exploited. Can USDX push for stricter audits?" The issuer has a prestigious background, but has remained silent so far. Public information shows that Stable Labs, the issuer of USDX, describes itself as a "stablecoin and tokenized asset issuer compliant with EU MiCA regulations." In 2024, the company announced a $45 million funding round at a valuation of $275 million. According to the press release at the time, the round was led by NGC, BAI Capital, Generative Ventures, and UOB Venture Management, with existing investors including well-known industry institutions such as Dragonfly Capital and Jeneration Capital. However, facing the severe de-pegging crisis of its core product, USDX, this company with a prominent investment background has yet to make any public response, and its silence has exacerbated market uncertainty.