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BTC $67,380.14 -1.44%
ETH $1,964.10 -2.36%
BNB $613.55 -0.67%
XRP $1.37 -2.04%
SOL $80.31 -3.30%
TRX $0.2781 +0.52%
DOGE $0.0918 -0.90%
ADA $0.2586 -1.24%
BCH $514.70 -1.12%
LINK $8.39 -1.62%
HYPE $30.66 +6.67%
AAVE $108.77 -0.27%
SUI $0.9072 -2.25%
XLM $0.1563 -0.53%
ZEC $237.04 +1.33%

susd

Report: Recent plunge in the cryptocurrency market puts $1 billion sUSDe circular trading at risk

According to ChainCatcher news, as reported by CoinDesk, Sentora Research reports that nearly $1 billion in DeFi positions involving Ethena staking's USDe (sUSDe) are at risk following the cryptocurrency market crash.The crash has led to a significant drop in DeFi market interest rates, with leveraged strategies such as sUSDe circular trading seeing reduced returns. In the Aave v3 core version, the borrowing rates for USDT/USDC are approximately 2% and 1.5% higher than the returns on sUSDe, respectively. Users borrowing stablecoins to leverage long positions on sUSDe are experiencing negative returns, and circular positions borrowing stablecoins to buy sUSDe are beginning to incur losses.If this situation persists, approximately $1 billion in positions exposed to negative interest rate spreads in the Aave v3 core version may be liquidated. Negative interest rate spreads could force collateral liquidation or deleveraging, weakening liquidity in trading venues and triggering a chain reaction. Sentora warns traders to pay attention to the interest rate spread between Aave's borrowing annualized yield and sUSDe returns, especially when it remains negative, as well as the utilization rates of USDT and USDC lending pools. Currently, an increasing number of circular positions are nearing liquidation. In the future, traders should monitor the surge in utilization rates of USDT and USDC lending pools, which may drive up borrowing costs and exacerbate market pressure when the interest rate spread is negative.
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