2026-01-16 05:28:13

A shocking market anomaly occurred in the early morning of October 11th Beijing time. The third-largest global stablecoin USDe plummeted from $1 to $0.65 on a major exchange, causing a rapid devaluation of $14 billion in market cap within a short period. The entire event is a textbook example of a market crash.

**Flash Crash Timeline**

At 02:17, the price remained at $1.00, but just 13 minutes later at 02:30, it crashed to $0.65. The market experienced a difficult recovery lasting over two hours, only barely rebounding to around $0.995 by 04:24. The entire process from start to relative stabilization took only 127 minutes, during which full liquidation, panic selling, and on-chain liquidations occurred repeatedly.

**Why Did It Flash Crash?**

First, look at the yield design. This stablecoin once boasted an annualized yield of up to 50%, but these returns did not come from traditional US Treasury interest income. Instead, they were built on high leverage operations and complex arbitrage strategies—essentially a game of hot potato.

Next is the domino effect. Once the collateralization ratio fell below the risk threshold, the protocol triggered a frantic redemption mechanism. At the same time, a large amount of stETH was dumped and sold off, causing the market to instantly lose the necessary liquidity support. This triple blow directly triggered a system-wide collapse.

The deepest issue lies in the breakdown of trust. People suddenly realized that so-called high-yield stablecoins are fundamentally a confidence game. The algorithms and mechanisms cannot truly guarantee safety. Once market expectations reverse, all promises are shattered.

**A Reminder to the Community**

The underlying logic of the crypto world is simple: when you focus on others’ annualized yields, they are already eyeing your principal. The so-called high-yield stablecoins are actually carefully designed harvesting schemes. The greater the attraction, the deeper the trap. Next time you see products claiming ultra-high returns, remember to ask yourself one more question: why?

USDE0,01%

STETH1,29%

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rekt_but_not_broke

· 01-19 05:19

Another good show, smashing from 1 dollar to 0.65 in 13 minutes—this pace is incredible. 50% annualized? Wake up everyone, there’s no such thing as risk-free returns. I was also cut at the beginning, but now I just pass on this kind of product. Playing the hot potato game until the end, someone has to catch the last stick. Seeing the buddy who got liquidated, I still have to be grateful that I only lost a little. There’s no free lunch in the world, I understand the principle, but it’s easy to get caught up in the hype. This time I’ve learned my lesson again; next time I see ultra-high returns, I’ll ask three questions first.

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BridgeJumper

· 01-18 09:58

13 minutes from $1 to $0.65, now that's really exciting, more thrilling than a roller coaster 50% annualized return? Wake up, this is just digging a hole for you High leverage again, arbitrage again, honestly just afraid you have more principal The ones who get cut are always those waiting for returns, when will they ever understand this principle Playing hot potato for so many years and still falling for it, truly incredible Liquidity can disappear in an instant, faster than lightning, hilarious Once trust is broken, it can never be glued back, maybe this time some people will finally understand

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OnChainArchaeologist

· 01-16 05:57

50% annualized return, haha, this is really a hilarious joke You can see through it on-chain, isn't this just a game of hot potato A 35% drop in 127 minutes, really fast, the losers must be thrilled It's stablecoins again, with high yields, it's really a confidence game How many newbies got caught this time

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zkProofGremlin

· 01-16 05:49

127 minutes from 1 to 0.65, is this what you call a stablecoin? Laughing my ass off Another game of hot potato, the dream of 50% annualized returns, the principal is gone 50% annualized return? Bro, that's not a golden goose, that's a sickle Trust shattered so quickly, on-chain promises are as flimsy as air Stop focusing on returns, others are already watching your wallet Woke up to 14 billion evaporated, truly the end High-yield stablecoin = a carefully crafted scam script, no doubt Fell from stability to collapse in 13 minutes, algorithm protection? All a joke Reminds me of that saying, when you're watching others' returns, they're cutting your principal Next time I see a product with super high annualized returns, I'll just treat it as a joke

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ZenZKPlayer

· 01-16 05:47

13 minutes from 1 to 0.65, this game of pass-the-parcel finally got exposed 50% annualized? Wake up, that's your sedative Another confidence game collapses, remember to stay away from high yields next time 140 billion market cap evaporated in a flash, this is the true face of so-called stablecoins While you're focused on returns, the other side is already eyeing your principal, old tricks with new actors 127 minutes of slaughter, I don't understand but I am deeply shocked When you think 50% annualized is reasonable, it's time to be cautious Once liquidity is cut off, all mechanisms are useless, just paper wealth Getting up early to see a liquidation, the crypto world’s drama changes three times a day Algorithms can't hold trust; no matter how complex the design, it can't withstand a panic sell

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TerraNeverForget

· 01-16 05:46

Another textbook-level harvest, dropping from 1 to 0.65 in 13 minutes. This is what they call a stablecoin, hilarious. Annualized 50%? Wake up, there’s no free lunch in this world, it’s all a game of musical chairs. 140 billion market cap instantly evaporated, and some still shout about buying the dip? I’m already tired just watching. High-yield stablecoins = carefully designed money-making machines for the little guys. How many more will be taken this time? Liquidations, margin calls, and crashes within 127 minutes... blood flows on the chain, this is when people’s true nature is most visible. Basically, it’s a confidence game. If the algorithm can’t hold, then it’s time to sell. Next time you see something promising a 50% annualized return, just ask: What gives you the right?

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TopBuyerForever

· 01-16 05:35

50% annualized? Man, that's just outrageous. Playing pass-the-parcel and pretending to be so grandiose. Don't ask me how I know, I'm the unlucky one who took over. Said 14 billion and it's gone, really unbelievable. Got caught again this time, why is it always me taking the hit? It's just a confidence game, in the end it's just a game of pass-the-parcel. I actually took it seriously. 14 billion gone in the time it takes to have a meal, this deal isn't worth it, everyone. Next time I see this kind of scam product, I'll just open the mic and call it out. Algorithm guarantee? Uh... there's no such thing. 127 minutes from 1 to 0.65, even my speed can't keep up.

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