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

4 min read

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)
$0.8822
$0.8822$0.8822
-2.06%
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

Solana Hits $4B in Corporate Treasuries as Companies Boost Reserves

Solana Hits $4B in Corporate Treasuries as Companies Boost Reserves

TLDR Solana-based corporate treasuries have surpassed $4 billion in value. These reserves account for nearly 3% of Solana’s total circulating supply. Forward Industries is the largest holder with over 6.8 million SOL tokens. Helius Medical Technologies launched a $500 million Solana treasury reserve. Pantera Capital has a $1.1 billion position in Solana, emphasizing its potential. [...] The post Solana Hits $4B in Corporate Treasuries as Companies Boost Reserves appeared first on CoinCentral.
Share
Coincentral2025/09/18 04:08
SHIB Price Prediction: Mixed Signals Point to $0.0000085 Target by February End

SHIB Price Prediction: Mixed Signals Point to $0.0000085 Target by February End

Technical analysis reveals SHIB trading near oversold levels with RSI at 35.06. Despite bearish MACD momentum, support levels suggest potential recovery toward $
Share
BlockChain News2026/02/04 16:04
CEO Sandeep Nailwal Shared Highlights About RWA on Polygon

CEO Sandeep Nailwal Shared Highlights About RWA on Polygon

The post CEO Sandeep Nailwal Shared Highlights About RWA on Polygon appeared on BitcoinEthereumNews.com. Polygon CEO Sandeep Nailwal highlighted Polygon’s lead in global bonds, Spiko US T-Bill, and Spiko Euro T-Bill. Polygon published an X post to share that its roadmap to GigaGas was still scaling. Sentiments around POL price were last seen to be bearish. Polygon CEO Sandeep Nailwal shared key pointers from the Dune and RWA.xyz report. These pertain to highlights about RWA on Polygon. Simultaneously, Polygon underlined its roadmap towards GigaGas. Sentiments around POL price were last seen fumbling under bearish emotions. Polygon CEO Sandeep Nailwal on Polygon RWA CEO Sandeep Nailwal highlighted three key points from the Dune and RWA.xyz report. The Chief Executive of Polygon maintained that Polygon PoS was hosting RWA TVL worth $1.13 billion across 269 assets plus 2,900 holders. Nailwal confirmed from the report that RWA was happening on Polygon. The Dune and https://t.co/W6WSFlHoQF report on RWA is out and it shows that RWA is happening on Polygon. Here are a few highlights: – Leading in Global Bonds: Polygon holds 62% share of tokenized global bonds (driven by Spiko’s euro MMF and Cashlink euro issues) – Spiko U.S.… — Sandeep | CEO, Polygon Foundation (※,※) (@sandeepnailwal) September 17, 2025 The X post published by Polygon CEO Sandeep Nailwal underlined that the ecosystem was leading in global bonds by holding a 62% share of tokenized global bonds. He further highlighted that Polygon was leading with Spiko US T-Bill at approximately 29% share of TVL along with Ethereum, adding that the ecosystem had more than 50% share in the number of holders. Finally, Sandeep highlighted from the report that there was a strong adoption for Spiko Euro T-Bill with 38% share of TVL. He added that 68% of returns were on Polygon across all the chains. Polygon Roadmap to GigaGas In a different update from Polygon, the community…
Share
BitcoinEthereumNews2025/09/18 01:10