Star Xu: How Did USDe Leverage Loops Trigger the "1010" Crash?Description: OKX founder and CEO Star Xu @star_okx questio | Hanami
Star Xu: How Did USDe Leverage Loops Trigger the "1010" Crash?
Description: OKX founder and CEO Star Xu @star_okx questioned Binance's promotion of USDe as a stablecoin on the New Era Finance Podcast @new_era_finance. He argued that USDe, issued by Ethena, is effectively a "tokenized hedge fund" and that a delta-neutral strategy does not imply zero or low risk.
He further noted that Binance allowed users to borrow USDT against USDe, convert it into more USDe, and repeat the loop to increase yields, amplifying leverage and risk exposure along the way. In his view, this setup was a major cause of the cascading liquidations during the "1010" crash and represented a serious risk-control failure.