During the sharp decline in the cryptocurrency market, the third largest stablecoin USDe briefly decouples from the US dollar.

During a market crash, the income-based stablecoin USDe of the cryptocurrency project Ethena temporarily lost its peg to the US dollar, highlighting the vulnerability of the new stablecoin mechanism in extreme market conditions. On Friday, USDe briefly fell to 65 cents on the Binance exchange before quickly recovering to near the price level of the US dollar. This token, known as "synthetic dollar," currently provides a 5.5% yield for holders and has a market capitalization of $14 billion, making it the world's third largest stablecoin. The market crash was triggered by Trump's tariff threats, leading investors to flock to safe-haven assets such as gold and US treasuries. According to Coinglass data, over $19 billion worth of long positions in cryptocurrencies were liquidated in the past 24 hours, with over 1.6 million traders facing forced liquidation. Binance stated that they are conducting a comprehensive review of affected users, liquidation details, and appropriate compensation measures. Ethena Labs responded on social media that the token still maintains an over-collateralized state. Depegging event shakes market confidence Although the price fluctuations of USDe were brief, they were enough to raise concerns among investors. BTC Markets analyst Rachael Lucas said: Even brief stablecoin depegging events can shake the market. Traders rely on them for liquidity, lending, and collateral, so any loss of confidence could trigger liquidation and spread to wider cryptocurrency volatility. Binance mentioned in a blog post that two other tokens besides USDe also lost their peg. The exchange stated that they are thoroughly reviewing affected users and developing appropriate compensation measures. Ethena Labs' governance token ENA also suffered an impact, with a 43% decrease in the past 24 hours according to CoinGecko data. Unique income mechanism facing stress test USDe generates income through a basis trading strategy, which exploits price differences between spot and futures markets to generate returns. The token is backed by digital asset reserves including stablecoins such as USDT and USDC. When the cryptocurrency market is thriving and funding rates are high, the mechanism relied on by Ethena can generate high returns. Funding rates are the interest paid by bullish traders on leveraged futures positions. However, during a large-scale sell-off, this mechanism faces a severe test. In the current market downtrend, Ethereum's hourly funding rate has dropped to the lowest level since at least August 2024 when the Japanese yen arbitrage trade was liquidated. This decline threatens the yield of USDe. The income-generating structure of USDe is a key differentiating factor from its competitors USDT and USDC. The latter two are the world's largest stablecoins, primarily backed by highly liquid assets such as US treasuries. Despite structural differences, cryptocurrency data tracking platforms CoinGecko and CoinMarketCap still classify USDe as a stablecoin. This classification reflects the market's acceptance of the new stablecoin mechanism, but also highlights the challenges of maintaining stability in extreme market conditions. This article was reprinted from Wall Street View, edited by GMTEight: Chen Wenfang.