The Solana ecosystem is facing fresh turbulence after USX stablecoin, a synthetic stablecoin issued by Solstice, suffered a sharp but temporary depeg on secondaryThe Solana ecosystem is facing fresh turbulence after USX stablecoin, a synthetic stablecoin issued by Solstice, suffered a sharp but temporary depeg on secondary

Liquidity drain causes Solana-based USX stablecoin to depeg to $0.1

The Solana ecosystem is facing fresh turbulence after USX stablecoin, a synthetic stablecoin issued by Solstice, suffered a sharp but temporary depeg on secondary markets.

The incident has reignited concerns around liquidity management, even as the issuer and independent analysts stress that USX’s collateral backing remained intact.

Sudden sell pressure rattles secondary markets

USX began losing its peg in the early hours of December 26, with market watchers noting unusual price movements shortly after 01:45 UTC.

Sell pressure on decentralised exchanges, particularly Orca and Raydium, quickly overwhelmed available liquidity, and as pools were drained, the stablecoin’s price slipped well below its intended $1 mark.

At the height of the disruption, USX reportedly traded as low as $0.1 on thin secondary markets, according to blockchain security firm PeckShield.

PeckShieldAlert
@PeckShieldAlert
·Follow

#PeckShieldAlert The stablecoin $USX on #Solana suffered a temporary depeg, dropping to $0.1 on secondary markets due to a liquidity drain. The peg was subsequently restored to $0.94 after @solsticefi injected liquidity.

8:54 am · 26 Dec 2025
89 Reply Copy link
Read 11 replies

Other traders and analysts observed prices in the $0.79 to $0.92 range as volatility rippled across Solana-based trading venues.

The wide variation underscored how fragmented liquidity and panic-driven selling distorted the price discovery process.

However, the depeg was confined to secondary markets, where the USX stablecoin trades freely on DEXs.

These venues rely on liquidity providers rather than guaranteed redemption mechanisms.

As sellers rushed to exit positions, arbitrage failed to stabilise prices quickly, allowing the discount to deepen before support arrived.

Solstice steps in to restore the USX stablecoin stability

Solstice acknowledged the volatility within hours and moved to address the imbalance.

At approximately 04:30 UTC, the team and its partners began injecting fresh liquidity into the affected pools.

On-chain data confirmed the intervention, and prices responded almost immediately.

Following the liquidity injection, USX’s price rebounded sharply, and the stablecoin began trading closer to parity.

Market data later showed the stablecoin hovering between $0.94 and $0.99, with some reports placing it near $0.987.

While the peg was not restored cleanly in a single move, stability gradually returned as depth improved.

Solstice has emphasised that the incident did not stem from a failure of backing.

Solstice has also stated that assets under custody remained unaffected and that USX stayed over 100% collateralized throughout the episode.

According to the team, the core protocol functioned as designed, and the disruption was purely a secondary market event.

The issuer also highlighted the distinction between primary and secondary markets. Institutional partners with permissioned access can mint and redeem USX directly at a 1:1 ratio, subject to KYC requirements.

Retail users, however, depend entirely on DEX liquidity, which can deviate from peg during periods of stress.

Questions linger despite the prompt intervention

Despite the swift response, the sharpness of the depeg raised eyebrows across the crypto community.

For some users, the damage was already done. Those who sold USX during the downturn locked in losses, as secondary market trades are final. Others who bought at a discount benefited from arbitrage opportunities created by the dislocation.

Although temporary depegs are not uncommon, a drop of this magnitude exposed vulnerabilities in how liquidity is distributed relative to circulating supply.

casinokrisa
@casinokrisa
·Follow
Replying to @PeckShieldAlert

Temporary depegs often signal liquidity management issues, even if collateral remains intact. Watch for recurring volatility.

11:03 am · 26 Dec 2025
0 Reply Copy link
Read more on Twitter

Several traders warned that reliance on manual intervention could amplify risk if market conditions worsen.

Actually, panic selling continued even after prices recovered, suggesting lingering unease among holders.

Some users even publicly compared the event to past stablecoin failures, including the collapse of Terra’s UST, though analysts stressed the comparison was flawed.

However, the USX stablecoin is neither algorithmic nor reliant on reflexive mint-and-burn mechanics, and its backing did not unravel.

Solstice has, however, countered the narrative by promising greater transparency.

The company has said that it has requested an immediate third-party attestation to verify reserves and pledged to deepen secondary market liquidity to reduce the chance of a repeat event, and stated that monthly proof-of-solvency reports are already available.

The post Liquidity drain causes Solana-based USX stablecoin to depeg to $0.1 appeared first on Invezz

Market Opportunity
Orca Logo
Orca Price(ORCA)
$1.073
$1.073$1.073
-0.64%
USD
Orca (ORCA) Live Price Chart
Disclaimer: The articles reposted on this site are sourced from public platforms and are provided for informational purposes only. They do not necessarily reflect the views of MEXC. All rights remain with the original authors. If you believe any content infringes on third-party rights, please contact [email protected] for removal. MEXC makes no guarantees regarding the accuracy, completeness, or timeliness of the content and is not responsible for any actions taken based on the information provided. The content does not constitute financial, legal, or other professional advice, nor should it be considered a recommendation or endorsement by MEXC.

You May Also Like

REX Shares’ Solana staking ETF sees $10M inflows, AUM tops $289M for first time

REX Shares’ Solana staking ETF sees $10M inflows, AUM tops $289M for first time

The post REX Shares’ Solana staking ETF sees $10M inflows, AUM tops $289M for first time appeared on BitcoinEthereumNews.com. Key Takeaways REX Shares’ Solana staking ETF saw $10 million in inflows in one day. Total inflows over the past three days amount to $23 million. REX Shares’ Solana staking ETF recorded $10 million in inflows yesterday, bringing total additions to $23 million over the past three days. The fund’s assets under management climbed above $289.0 million for the first time. The SSK ETF is the first U.S. exchange-traded fund focused on Solana staking. Source: https://cryptobriefing.com/rex-shares-solana-staking-etf-aum-289m/
Share
BitcoinEthereumNews2025/09/18 02:34
Why Everyone Is Talking About Saga, Cosmos, and Mars Protocol

Why Everyone Is Talking About Saga, Cosmos, and Mars Protocol

The post Why Everyone Is Talking About Saga, Cosmos, and Mars Protocol appeared on BitcoinEthereumNews.com. Layer-1 blockchain protocol Saga has faced a severe
Share
BitcoinEthereumNews2026/01/22 17:01
CME Group to Launch Solana and XRP Futures Options

CME Group to Launch Solana and XRP Futures Options

The post CME Group to Launch Solana and XRP Futures Options appeared on BitcoinEthereumNews.com. An announcement was made by CME Group, the largest derivatives exchanger worldwide, revealed that it would introduce options for Solana and XRP futures. It is the latest addition to CME crypto derivatives as institutions and retail investors increase their demand for Solana and XRP. CME Expands Crypto Offerings With Solana and XRP Options Launch According to a press release, the launch is scheduled for October 13, 2025, pending regulatory approval. The new products will allow traders to access options on Solana, Micro Solana, XRP, and Micro XRP futures. Expiries will be offered on business days on a monthly, and quarterly basis to provide more flexibility to market players. CME Group said the contracts are designed to meet demand from institutions, hedge funds, and active retail traders. According to Giovanni Vicioso, the launch reflects high liquidity in Solana and XRP futures. Vicioso is the Global Head of Cryptocurrency Products for the CME Group. He noted that the new contracts will provide additional tools for risk management and exposure strategies. Recently, CME XRP futures registered record open interest amid ETF approval optimism, reinforcing confidence in contract demand. Cumberland, one of the leading liquidity providers, welcomed the development and said it highlights the shift beyond Bitcoin and Ethereum. FalconX, another trading firm, added that rising digital asset treasuries are increasing the need for hedging tools on alternative tokens like Solana and XRP. High Record Trading Volumes Demand Solana and XRP Futures Solana futures and XRP continue to gain popularity since their launch earlier this year. According to CME official records, many have bought and sold more than 540,000 Solana futures contracts since March. A value that amounts to over $22 billion dollars. Solana contracts hit a record 9,000 contracts in August, worth $437 million. Open interest also set a record at 12,500 contracts.…
Share
BitcoinEthereumNews2025/09/18 01:39