Opinion: Market feeding price + high collateral rate leads USDe to repeat the UST tragedy, LSD-type assets face the same problem.

GateUser-6433627c · 2025-10-11T06:54:24+00:00

dForce founder Mindao pointed out that the current market big dump is similar to the Luna incident, both caused by trading platforms accepting illegal fiat stablecoins as high LTV collateral, leading to the spread of risk. The combination of high stake rates and market price feeding, along with a poor arbitrage environment, exacerbated the risk. LSD-type assets also face the same problem, which are essentially Fluctuation assets.

GateUser-6433627c

2025-10-11 06:54:24

Abstract generation in progress

On October 11, Mindao, the founder of the DeFi protocol dForce, posted on social media indicating that this big dump is similar to the Luna crash in that both occurred when major trading platforms began accepting illegal fiat stablecoins as high LTV collateral, allowing risks to penetrate between trading platforms. At that time it was UST, today it is USDe; “stability” + high loan-to-value has confused most people. When introducing illegal fiat stable assets as collateral, the worst combination is using market price feeds while allowing high collateral ratios; combined with the fact that CEX itself does not have a fully open arbitrage environment, the arbitrage efficiency is low, and risks are further amplified. LSD-like assets face the same problem. These assets are essentially volatile assets disguised as “stability.”

USDE-0,02%

LUNA0,92%

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