Who caused the crypto market's biggest liquidations on October 10? Insiders blame each other
Crypto executives and traders are publicly debating whether Ethena's USDe yield loop or general market leverage caused the massive October 10 flash crash.Summary
Months after the record October 10 crypto flash crash that resulted in $19.16 billion in liquidations, a public dispute has emerged regarding its cause. OKX CEO Star Xu blamed irresponsible yield campaigns, specifically pointing to Ethena's USDe token. Xu argued that USDe encouraged traders to create a self-feeding leverage loop by using it as collateral to borrow more stablecoins, which were then converted back into USDe, making the system fragile to volatility.
Market observers, including Dragonfly partner Haseeb Qureshi, countered Xu's narrative, calling it "ridiculous" because the stress on USDe was reportedly isolated to Binance, while the liquidation spiral occurred across all exchanges. Qureshi suggested the crash was caused by macro headlines spooking an already highly leveraged market, leading to reflexive forced selling as liquidity vanished.
Binance previously attributed the crash to a macro-driven selloff colliding with heavy leverage and vanishing liquidity, rejecting claims of a core trading system failure.
(Source：CoinDesk)