Viewpoint: The source of this massive liquidation may be the "USDE arbitrageurs' circular loan positions being liquidated".

BlockBeats news, on October 11, Formula News founder Vida posted on social media stating: "Recently, a fren told me there is a guaranteed arbitrage opportunity, which is to do USDE circular lending on Binance, with an annual interest rate of around 26%. The institutional frens he knows used 100 million USDT as principal to cycle it into 500 million USDE for arbitrage on the Binance trading platform." Vida explained that this massive liquidation was speculated to occur under the conditions of a significant market drop with low liquidity: · USDE arbitrageurs' circular lending positions were liquidated · Causing the low USDE price · Leading to a decrease in the collateral capacity of USDE as a unified account collateral · Triggering more positions of market makers using USDE as margin to be liquidated · Resulting in BNSOL and WBETH, these cumulative wealth management assets also hitting the liquidation threshold. Although BNSOL and WBETH have a high collateral rate, their value is entirely determined by the order book, and under those conditions, no one was there to support them to maintain the peg, which subsequently triggered a price collapse and more liquidations. It can be guessed that a large probability of some unified accounts used by market makers also got liquidated, leading to extremely extreme prices for many small coins.