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

2025/12/26 20:09
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)
$0.8176
$0.8176$0.8176
+0.35%
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 service@support.mexc.com 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

Reboost Plans Reverse Takeover of Pyratzlabs to Build Profitable Blockchain Group

Reboost Plans Reverse Takeover of Pyratzlabs to Build Profitable Blockchain Group

Reboost Blockchain Corp. (Euronext: MLCOT) has entered into a memorandum of understanding to acquire full ownership of Pyratzlabs through a share-based reverse
Share
CoinTrust2026/02/15 14:55
GBP/USD slips as US–China tensions cool, traders eye BoE speakers

GBP/USD slips as US–China tensions cool, traders eye BoE speakers

The post GBP/USD slips as US–China tensions cool, traders eye BoE speakers appeared on BitcoinEthereumNews.com. The Pound Sterling (GBP) slides on Monday during the North American session, down 0.18% as tensions between the US and China ease, following last Friday’s escalation, which prompted investors to buy safety assets. At the time of writing, GBP/USD trades at 1.3325 after hitting a daily high of 1.3366. Sterling eases amid calmer trade rhetoric and cautious mood ahead of key UK economic releases Last week, US President Trump threatened to impose 100% duties on China’s goods as retaliation for China’s rare earth metals export controls. Nevertheless, Trump posted on Sunday on Truth Social, “Don’t worry about China, it will all be fine!” Earlier, the Treasury Secretary Scott Bessent said that he still expects Trump to meet Chinese President Xi Jinping at the Asia-Pacific Economic Cooperation summit in South Korea later this month. Aside from this, the lack of economic data in the US keeps traders entertained with US politics, the government shutdown and Federal Reserve (Fed) officials crossing the wires. In the UK, investors remain focused on the release of the Autumn budget. However, the docket will feature jobs data and Gross Domestic Product (GDP) figures in the three months to August. Bank of England (BoE) policymakers will speak this week, with six of the nine members of the Monetary Policy Committee (MPC) hitting the wires. Money markets are expecting the BoE to hold rates unchanged, pricing in the next adjustment until March 2026, as inflation is double the bank’s target. GBP/USD Price Forecast: Technical outlook The technical picture shows GBP/USD is trading neutral to slightly tilted to the downside, as price action remains below the 20, 50 and 100-day SMAs, an indication that in the short and medium term, sellers are in charge. Additionally, the Relative Strength Index (RSI) is bearish, trending downward, a sign that further downside…
Share
BitcoinEthereumNews2025/10/14 00:11
SOL Price Prediction: Targets $100 Breakout by March 2026

SOL Price Prediction: Targets $100 Breakout by March 2026

Solana trades at $90.09 with technical indicators pointing to potential $100 breakout. RSI neutral at 39.82 suggests room for upward momentum in coming weeks. (
Share
BlockChain News2026/02/15 15:35