Author | Wu Says Blockchain
Due to a post by Trump that triggered severe fluctuations in the financial markets, as of 8 AM on October 11, Coinglass data shows that the total liquidation amount across the network in the past 24 hours is approximately $19.134 billion, with long positions liquidated amounting to about $16.679 billion. Meanwhile, Binance issued a statement indicating that due to a surge in market trading activity, the platform's system is currently under high load, causing delays and page anomalies for some users. Binance confirmed that the relevant issues have been identified and are being addressed, and user funds remain secure.
At 8:20 AM, Binance tweeted that all services on the platform have returned to normal and are gradually recovering. The official team will continue to closely monitor the situation to ensure smooth operations. According to Binance contract data, during this significant drop, the balance of the insurance fund shared by BTC, ETH, BNB, and USDT contracts on Binance decreased from $1.23 billion to $1.04 billion, utilizing $188 million for risk management in extreme market conditions.
The price of the USDe stablecoin deviated from its 1:1 peg to the dollar, dropping to a low of $0.6567 in the past 24 hours. USDe is a dollar-pegged stablecoin issued by the Ethena protocol. Ethena Labs stated that the secondary market price of USDe has fluctuated due to market volatility and large-scale liquidations. The protocol confirmed that the minting and redemption functions have remained operational during this period without interruption, and USDe continues to maintain an over-collateralized status. Due to perpetual contract prices consistently being below spot prices, the unrealized gains from the short positions held by Ethena are being realized, which will further enhance the collateralization rate of USDe. The team stated that more updates will be released based on subsequent developments. Meanwhile, a large number of altcoin prices on Binance plummeted, with ATOM dropping to a low of $0.001 and IOTX briefly falling to $0. The IoTeX official team stated that they have noticed the extreme market fluctuations and confirmed that the IoTeX network and all on-chain assets are completely safe and operating normally. The official team is closely monitoring market conditions and coordinating with partners to ensure stability.
At 9:30 AM, Binance responded to the USDe, BNSOL, and BETH de-pegging incident, stating that their team is currently conducting a comprehensive review of affected users, relevant liquidation details, and reasonable compensation measures.
According to Parsec data, in the past 24 hours, the DeFi lending liquidation volume exceeded $210 million, with wBTC liquidations reaching $49.6 million, ETH liquidations at $39.7 million, and cbBTC liquidations at $31.6 million, among others.
Notably, Hyperliquid is the exchange with the highest liquidation amount across the network, with liquidations reaching as high as $10.276 billion in the past 24 hours, of which long positions accounted for $9.3 billion. HLP Vault earnings surged from the original $80 million to over $120 million, with an increase of about $40 million in the past 24 hours. Meanwhile, under extreme market conditions and large-scale liquidations, Hyperliquid experienced a net outflow of $642 million USDC in a single day, setting a historical record. Hyperliquid's AUM has decreased from over $6 billion USDC in late September to approximately $5.1 billion USDC currently.
According to MLM monitoring, a Bitcoin whale closed 90% of its BTC short positions and fully closed its ETH short positions on Hyperliquid, making a profit of about $190 to $200 million in just one day. Notably, this whale established short positions in BTC and ETH worth nine figures just minutes before the market drop. This is only its publicly disclosed position on Hyperliquid, and its operations on centralized exchanges or other platforms remain unknown; this account may have played a key role in the day's market movements.
In response to today's market rumors of "Crypto.com and Wintermute possibly facing a crisis," Crypto.com CEO Kris Marszalek commented that "the system is running perfectly, and this is unfounded FUD"; Wintermute team BD and partner member Arnaud stated that the remarks are rumors.
BitMEX co-founder Arthur Hayes tweeted that market rumors suggest that large centralized exchanges (CEX) automatically liquidated collateral related to cross-margin positions, which led to the price crashes of many altcoins during this decline. The prices of many quality altcoins are unlikely to return to those lows in the short term.
The Lighter team issued a downtime warning at 12:23 UTC+8, stating that orders could not be processed or executed and that they are working to fix the issue. Lighter's status shows that the Lighter mainnet service has been interrupted, with API, frontend, and transaction sending all halted. Lighter's official Twitter stated that this is a technical issue caused by exceptionally high TPS over the past 12 hours. In response to some users reporting issues with liquidation and data confusion, Backpack stated that due to recent market fluctuations, the Backpack system is under high load; historical data is being synchronized; all real-time systems are operating normally, including market, balance, positions, and borrowing. Backpack's official data shows that on October 10, the liquidation volume of Backpack contracts reached $181.6 million, with SOL-PERP liquidation volume at $71.8 million; total user assets were $421 million, platform assets were $425 million, and the reserve rate was 100.89%.
According to @BroLeonAus's summary, during this round of extreme market conditions, several decentralized contract platforms (PerpDEX) exhibited significant differences in performance. Lighter faced the most severe issues, unable to place orders or withdraw since last night, with the LLP treasury losing about 10%; Backpack experienced order delays and position anomalies but has since returned to normal; Aster DEX has not reported any trading anomalies; edgeX treasury earnings were 0.48%, which does not align with the scale of market liquidations and may be related to a one-day data update delay; both ParaDEX and Extended treasury earnings exceeded 10%. The standout performer was Hyperliquid, which operated stably without delays, with the HLP treasury earning over $40 million in a single day, yielding over 10%, far exceeding the total of other platforms combined.
The Solana core development team Anza stated that during last night's large-scale liquidation event, the Solana network underwent its largest stress test to date, with peak processing speeds reaching 100,000 TPS, and the network remained stable. Its validation client Agave handled six times the peak traffic and a load of 60 million computation units (CU) per block without performance degradation.
At 2 PM, Bitget CEO Gracy Chen tweeted that the team has noticed some users receiving abnormal market quote notifications on the Bitget App in the past 30 minutes. This was due to historical message delivery delays. The official team is working with service providers to resolve this issue, which only affects price notifications, while all trading, deposit, and withdrawal services remain normal, and user assets are completely secure.
Uniswap founder Hayden Adams tweeted that the large-scale sell-off serves as a good reminder of how DeFi is different. Uniswap's trading volume today approached $9 billion, far exceeding normal levels, and the platform did not experience any pressure or downtime. OKX CEO Star stated that OKX's global risk control system is operating stably, with smooth operations across all regions, and all system indicators are at normal levels. Hyperliquid stated that during the recent market fluctuations, despite traffic and volume reaching historical highs, there were zero downtime or delay issues with the Hyperliquid blockchain, and HyperBFT consensus and execution handled peak throughput, marking an important stress test that proves Hyperliquid's decentralized and fully on-chain financial system can be robust and scalable.
In the evening, He Yi posted that due to significant market fluctuations over the past 16 hours and an influx of users, some users encountered issues while trading, and he expressed his sincere apologies. For losses caused by Binance's issues, users can contact customer service to register, and their account activities will be reviewed for analysis and compensation, which will take some time, but losses and unrealized profits due to market fluctuations are not covered. Several KOLs revealed that Binance may be about to announce its largest compensation plan in history.
Crypto analyst @ali_charts stated that today the crypto market experienced one of the largest liquidation events in recent years, with approximately $19.3 billion in positions forcibly liquidated in a single day, involving about 1.66 million traders. Bitcoin briefly dropped about 17% during the day, followed by a partial rebound. Ali pointed out that this market movement resembles the rapid correction that occurred after Bitcoin reached its peak of $69,200 in 2021, which was also accompanied by concentrated liquidations of high-leverage long positions. He believes that while the short-term rebound may be seen as a buying opportunity, investors should remain cautious and strengthen risk control and stop-loss management.
Mindao, founder of the DeFi protocol dForce, posted on social media that this drop is similar to the Luna crisis in that both occurred when major trading platforms began accepting illegal stablecoins as high LTV collateral, with risks starting to penetrate between trading platforms. At that time it was UST, today it is USDe; the stability and high collateralization rate confused most people. When introducing illegal stablecoin assets as collateral, the worst combination is to use market price feeds while allowing high collateralization rates; coupled with the fact that CEX itself does not have a fully open arbitrage environment, leading to low arbitrage efficiency, the risks are further amplified. LSD-type assets face the same problem. These types of assets are essentially volatile assets disguised as stable assets.
Crypto.com CEO Kris Marszalek stated that regulators should investigate the exchanges with the largest liquidation volumes in the past 24 hours and conduct a thorough review of the fairness of trading practices. Are there exchanges that slowed to a halt, effectively preventing people from trading? Are all trade prices correct and consistent with indices? What are the setups for trading monitoring and anti-money laundering procedures? Is their internal trading team completely independent? With liquidation amounts reaching $20 billion, many users have suffered losses. It is the responsibility of regulators to protect consumers and ensure market integrity.
Fundstrat co-founder and BitMine chairman Tom Lee stated in an interview with CNBC that the decline was expected, as there has been a 36% increase since the low in April. Today, the fear index VIX rose by 29%, marking the 51st largest single-day volatility in history, falling within the top 1% of extreme market conditions. Today's drop is a good washout. What I want to tell everyone is that the market is indeed a bit tense, but unless there is a real structural change, this pullback is a buying opportunity. I cannot definitively say that the market has bottomed today, but we know that under the current circumstances, the performance in the coming week and even month will be good. If someone asks me how the market will perform in a week, I would say the probability of an increase is quite high.
DWF Labs executive partner Andrei Grachev stated that today's market crash was not due to fundamental factors like the FTX collapse, but rather due to tariff announcements and the subsequent leveraged liquidations. Market liquidity has been exhausted, but Bitcoin and strong projects should recover soon.
Mindao stated that common ways to introduce such stable assets as collateral include setting high collateralization rates and fixed price anchors, or feeding market prices but setting low collateralization rates; the most dangerous combination is using market prices while allowing high collateralization rates, and the low arbitrage efficiency of centralized exchanges amplifies the risks. He believes that LSD-type assets also face similar issues.
Conflux's CSO Forgiven analyzed that the massive drop on October 11 is speculated to be a premeditated attack targeting Bn and a major market maker of Bn. The three margin targets most severely affected by this attack were USDE, Wbeth, and BnSol, which served as collateral for a unified account. The liquidation prices were based on Bn's own spot market prices, rather than being rigidly pegged; in the case of a general decline in Bitcoin and altcoins, contract traders were likely to be at a loss, and with the cryptocurrency collateral depreciating further, USDE dropped to a low of 0.65, Wbeth to a low of 0.2, and BnSol to a low of 0.13. Even with a hedging strategy, the significant shrinkage of collateral would prevent the maintenance of positions. This triggered a chain reaction of liquidations for most of Binance's contract positions and the three targets. Another piece of evidence supporting the notion of a premeditated and planned attack is the timing, which was very subtle, occurring just after Binance adjusted the oracle price announcement, but before the actual adjustment took place; the announcement was made on October 6, with the actual adjustment set to occur on the 14th.
He Yi posted on X, stating, "Binance will handle its own issues. Friends who picked up low-priced de-pegged assets yesterday earned from staying up late; we will not pursue this part; users involved with the three de-pegged wrapped assets are being processed gradually; for trading users who suffered losses and liquidations due to our platform's issues during the lag, we will handle them one by one." He Yi also pointed out that customer service staff in training and cross-language customer service using translation may lead to more backlogs and issues, but Binance will not compensate for personal trading losses or unrealized losses due to price fluctuations.
Binance announced that due to recent market volatility and related platform issues, USDE, BNSOL, and WBETH have experienced price de-pegging. For contract, leverage, and lending users affected by this event from 05:36 to 06:16 (UTC+8) on October 11, 2025, the platform will issue compensation within 72 hours, amounting to the difference between the market price at 08:00 (UTC+8) on October 11, 2025, and the actual liquidation price. In addition to automatic compensation, other affected users can submit individual case applications to customer service. Binance also stated that it will strengthen risk control mechanisms, including incorporating redemption prices into the index calculations for USDE, WBETH, and BNSOL, setting a minimum price threshold for USDE, and increasing the frequency of risk parameter reviews to respond to extreme market fluctuations.
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