Four months have passed, and the industry is still arguing nonstop about the record-breaking flash crash event on October 10th last year. Recently, this debate has escalated into open name-calling, with the core issue being very simple: what exactly triggered this disaster?

The founder of a certain exchange recently spoke out, pointing the finger at Ethena's USDe token. His logic is as follows: many people were lured into swapping stablecoins for USDe to earn high yields, then using USDe as collateral to borrow stablecoins, and then swapping back into USDe, repeating the cycle. It sounds plausible, but the problem is that traders were treated like fools, assuming USDe was as safe as regular stablecoins, when in fact the risks were much higher.

He claims this leveraged cycle is a ticking time bomb. On October 10th, macro shocks arrived (Trump's tariff escalation), and the market might have just dipped slightly, but because of this structured leverage, a small spark turned into a big explosion. Ultimately, over 19 billion USD was liquidated, with 16 billion coming from long positions being wiped out.

But this explanation was immediately challenged. A partner at a well-known investment firm called this theory absurd, trying to force a single villain onto a complex event. He pointed out that if USDe alone had triggered everything, the pressure should have appeared simultaneously across all exchanges. But in reality? USDe only devalued on a major exchange, while other places remained unaffected. Yet the liquidation spiral occurred across all exchanges. So, USDe's devaluation cannot explain why every exchange experienced massive liquidations.

Another macro-level explanation was offered: this was a macro-driven event. The market was highly leveraged, liquidity suddenly dried up, and mechanized liquidation engines kicked in, like knocking over the first domino. Forced selling drove prices down, leading to more forced selling and a panic spiral. This isn’t a problem with a single product but a structural issue with the entire market.

The founder of a large exchange also came out in support of the macro-driven explanation, subtly implying that another party had vested interests. But this accusation was directly denied. The event then brought up another perspective: perhaps neither side was entirely correct. Some market insiders believe the real issue is that the entire industry was over-leveraged on alternative tokens, and the macro shock merely burst this bubble. Without genuine organic demand backing these assets, once sentiment shifted, there was no one left to catch the falling knife.

At its core, this debate reflects a deeper issue: our understanding of market risk is still insufficient. Is it a single point of failure or systemic fragility? Possibly both. Four months have passed, and this question continues to trouble the industry.