USDX, the synthetic stablecoin issued by Stable Labs, experienced a serious downturn today, falling below $0.60.
It is currently trading around $0.80.
The sharp decline in value of USDX, whose circulating supply has reached levels of $683 million, has raised concerns about the potential domino effect it could have on the protocols it is integrated with.
The first reactions came from leading platforms in the ecosystem. On-chain lending platform Lista DAO and Binance-backed decentralized exchange PancakeSwap announced that they were closely monitoring the situation and evaluating risk mitigation measures.
Lista DAO used the following statements in its post on X:
“We are closely monitoring MEVCapital’s USDT Vault and Re7Labs’ USD1 Vault. Their collateral assets, sUSDX and USDX, are facing abnormally high borrowing rates with no redemption activity.”
Similarly, PancakeSwap also urged its users to check their positions:
We are aware of the affected vaults and are monitoring the situation closely. Please review your relevant positions on PancakeSwap. We will continue to share updates.
USDX is listed with USDT pair on various centralized and decentralized exchanges, including Uniswap, according to CoinMarketCap data.
Stable Labs has not yet made any statement regarding depeg.
The company describes itself as a MiCA-compliant stablecoin and tokenization company. USDX announced it had raised $45 million in 2024 from investors including NGC, BAI Capital, Generative Ventures, and UOB Venture Management. Dragonfly Capital and Jeneration Capital are among the company's existing investors.
USDX states that it uses delta-neutral hedging strategies across exchanges to protect against pegs. While the exact cause of the crash is unknown, it is believed to have been triggered by the $128 million Balancer attack on November 3rd.
Stable Labs’ forced liquidations of BTC/ETH short positions allegedly caused massive redemptions, accelerating the collapse of the USDX.
Following the developments, Lista DAO, in collaboration with Re7 Labs, initiated emergency liquidation steps in the USDX/USD1 vault.
*This is not investment advice.
