The post Ethena plans to use up to 1.2% of backing assets to buy discounted USDe below $0.99 via off-exchange settlements appeared on BitcoinEthereumNews.com.

Ethena Labs has proposed a new emergency-stabilization mechanism for its synthetic stablecoin, USDe, following the events of the October 10-11 market dislocation that saw the token price fall as low as $0.6567 on Binance despite the protocol remaining solvent and redemption flows continuing uninterrupted. The measure is designed to prevent similar depegging events from occurring on secondary markets when trading conditions become disorderly. A response to October’s exchange-driven dislocation According to Ethena, they currently have “$5 billion of stablecoins in the backing of USDe, most of which are readily available and liquid to meet redemption requirements at any given time.”  However, during the high-volatility event that hit the crypto market on October 10, a few crypto assets depegged from their original price, and the USDe stablecoin was part of them. For USDe, it was a combination of exchange-level constraints and rising Ethereum gas fees that prevented market makers from arbitraging the token back to its $1 redemption value.  The disruption led to a sharp dislocation in the USDe/USDT pair on Binance, where the token’s price slid below $0.99 and rapidly collapsed to $0.6567 within minutes. Liquidations of leveraged positions spilled directly into the spot order book, which in turn created a self-reinforcing cycle of sell pressure, liquidation, and a decline in price. It was a different story on the decentralized front, with USDe briefly going down to $0.997 on Curve’s USDe/USDC pool. According to Ethena, they were busy during that period of volatility, processing over $2 billion in redemptions in a 24-hour window without operational issues. This also showed that the depeg incidence was local to Binance. Mechanism to buy and burn discounted USDe To prevent a similar event from occurring again in the future, Ethena Labs is now proposing that it use up to 1.2% of its backed assets,…

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Filed under: News - @ November 17, 2025 9:27 pm