Event Overview

USX, as one of the important stablecoins in the Solana ecosystem, has always positioned itself with an over-collateralized design as its core selling point. The project team, Solstice, has defined it as a secure and stable tool supported by on-chain assets, with a collateralization rate greater than 100%, playing the role of a unit of account and liquidity medium in multiple DeFi scenarios. Recently, USX encountered a sudden drop in liquidity in the secondary market, with its price quickly plummeting from nearly the $1 peg level. According to monitoring data from PeckShield and others, the lowest transaction price fell to about $0.1, resulting in an extreme discount of 90% in a short period. Subsequently, after the Solstice team intervened with "emergency liquidity injections," the price of USX gradually recovered in the secondary market. According to multiple quotes from BlockBeats, Wu Says Blockchain, and PANews, it has now risen to about $0.94, but has not fully returned to the $1 peg. Concurrently, the project team has repeatedly emphasized that USX employs an over-collateralization mechanism, maintaining an overall collateralization rate above 100%, and that the net value of the underlying assets has not been affected. This coexistence of "on-chain asset security" and "secondary price decoupling" constitutes the core contradiction of this event.

Price and Data

From the price trajectory, the fluctuation range of USX this time has been extremely severe: the target peg is $1, yet it was smashed down to about $0.1 in a short time, representing a maximum deviation of 90% from the theoretical peg price, directly impacting the basic expectations for this asset class of "stablecoins." Several on-chain security and market monitoring institutions have provided relatively consistent data ranges: on-chain monitors like PeckShield tracked the lowest transaction price of USX during extreme periods to be around $0.1, while information sources such as BlockBeats, Wu Says Blockchain, and PANews indicated that after official intervention, the price of USX in the secondary market has risen to around $0.94. Compared to a complete re-pegging to $1, the current price still reflects a discount of about 6%, indicating that the market has not yet reassigned its "face value pricing." In terms of pace, the price did not instantly return to $1 but gradually repaired and stayed above the $0.9 area after the extreme low point, reflecting a lag in liquidity replenishment and market confidence recovery, with the secondary market still reassessing USX's risk premium.

Collateral and Net Value

Theoretically, the over-collateralization mechanism employed by USX and the collateralization rate greater than 100% should provide a risk buffer for price stability: when each USX is backed by on-chain assets worth more than $1, even in the event of partial liquidation or volatility, the liquidation mechanism and arbitrage logic should maintain a stable range. According to Solstice's official statement, the overall collateralization rate of USX remains above 100%, and "the underlying net value and custodial assets have not been affected." This statement still requires further independent verification. If the above assertion holds, it means that the theoretical asset security and valuation integrity have not been directly compromised, yet the price has been driven down to $0.1 in the open market, showing that the net asset value and secondary market price can completely decouple in a short time. The reason is that the single condition of "asset security" for stablecoins is insufficient to prevent extreme market conditions: when secondary market liquidity suddenly decreases, market depth declines, and mainstream liquidity pools cannot absorb concentrated selling pressure, arbitrageurs may not have the time or profit incentive to intervene, causing the traditional "net value as a peg" mechanism to be breached by instantaneous order book gaps and slippage structures, leading to a rapid repricing of the asset to levels far below the theoretical net value.

Liquidity Fragility

Structurally, USX's secondary market liquidity in Solana DeFi heavily relies on several mainstream liquidity pools and market-making scenarios. If these key pools have issues with excessive concentration in size or activity, once liquidity providers withdraw or there is excessive one-sided trading, it will create significant single-point dependency risks. Current public information has not disclosed specific pool names and proportions, but price behavior suggests that liquidity depth experienced a significant depletion during a certain period. When the scale of sell orders rapidly overwhelms relatively thin buy orders, the resulting slippage is magnified, triggering a series of chain reactions: early sell-offs lead to price drops, and the downward price movement further stimulates more panic selling, further draining depth. In this process, reports stating "this event is primarily a secondary market liquidity issue" become key clues, indicating that it was not initially triggered by asset-side defaults or custodial failures, but rather a clear misalignment of price risk and credit risk: the market first doubts "whether it can be exchanged for $1 value," which then forces a credit premium and valuation discount, rather than confirming that the underlying assets have already been damaged.

Official Response

After the price fell to extreme lows, the Solstice team initiated "emergency liquidity injections" as a response measure, but did not disclose the specific amount and source of the injection, only using the results of the actions and price recovery as the main explanatory path. According to data from multiple market sources, this operation did indeed provide significant support to USX's market price in the short term, with the price rapidly rebounding from around $0.1 to above $0.9, currently hovering around $0.94, indicating that the replenishment of depth and enhancement of buying power effectively repaired the most extreme discount range in a short time. However, from the perspective of still not fully re-pegging, the limitations of the liquidity injection are also quite clear: in a phase where market confidence has not fully recovered and arbitrage funds are still observing, a single capital injection is unlikely to directly eliminate the risk premium. In terms of mechanism design, current public information has not shown whether Solstice has a pre-established automated emergency plan, such as preset repurchase pools, insurance funds, or mechanisms triggered by excessive volatility. This response appears more like a "post-event manual intervention," leaving much room for discussion regarding transparency, predictability of rules, and the rhythm of information disclosure, making it difficult for outsiders to assess whether such interventions will be sustainable or replicable in the future.

Market Pricing

From the current price level of about $0.94, the market is re-pricing USX at a discount of about 6%. This discount not only reflects a slight doubt about the current asset security but, more importantly, a risk premium regarding the project team's future response capabilities and liquidity management mechanisms. The official emphasis on "underlying asset security" and "collateralization rate greater than 100%" defines the event as a secondary market liquidity issue, while the price's failure to fully re-peg indicates that investors remain cautious about this narrative: even if the asset side may not have incurred losses yet, the market will still price in concerns about "whether it can quickly restore the peg in the next shock" and "whether a 90% discount will occur again." This cognitive divergence not only affects USX itself but may also transmit to other similar stable assets within the Solana ecosystem and DeFi protocols that rely on it for collateral, pricing, or trading pairs, raising the risk premium associated with stablecoin strategies throughout the ecosystem. For example, lending protocols may become more conservative in assessing collateral discount rates for similar assets, and liquidity providers, in addition to measuring impermanent loss, may view "extreme decoupling" as a risk factor requiring additional compensation, thereby indirectly affecting the capital efficiency and TVL structure of the protocols.

Lessons Learned

The USX event highlights a key fact: even with an over-collateralized design and maintaining a superficial collateralization rate above 100%, if there is a lack of sufficiently diversified and sustainable secondary market liquidity, stablecoins may still experience severe mismatches in extreme market conditions, leading to a sudden disconnection between net value and price. For the Solana ecosystem, structural optimization is needed across multiple dimensions: on one hand, promoting liquidity to be distributed more widely across various protocols and trading scenarios to reduce reliance on a single or few pools; on the other hand, introducing more comprehensive risk control and incentive designs in market-making mechanisms, such as encouraging long-term LPs, presetting volatility buffer pools, and automated liquidity replenishment tools for extreme situations. Additionally, the project team's emergency plans need to be preemptive and transparent, including clearly defined liquidity support mechanisms, triggering conditions, and information disclosure rhythms. For regulators and investors, similar events are also reshaping evaluation frameworks: regulators may pay more attention to the institutional arrangements for liquidity management, secondary market depth, and responses to extreme situations in stablecoins, while investors, in assessing similar assets, need to add new risk dimensions such as "liquidity diversification," "market-making concentration," and "executability of emergency mechanisms," avoiding the assumption that price stability is guaranteed solely based on "over-collateralization."

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