Ethena's USDe Stablecoin Temporarily Loses Dollar Peg During $19B Crypto Market Crash

Ethena's yield-generating stablecoin USDe temporarily lost its 1:1 dollar peg during a massive market downturn triggered by former President Donald Trump's announcement of 100% additional tariffs on Chinese imports. On Binance exchange, USDe plummeted to $0.65 before rapidly recovering to parity amid what became cryptocurrency's largest-ever liquidation event by dollar value, with over $19 billion in positions liquidated within 24 hours. The USDe stablecoin, currently offering 5.5% annual yield to holders, utilizes a complex backing mechanism combining cryptocurrencies and basis trading strategies designed to profit from price differences between spot and futures markets. Trump's unexpected policy announcement triggered massive capital flight toward traditional safe-haven assets including gold and U.S. Treasury bonds. According to prominent crypto analyst Alex Krüger, USDe's price decline produced disproportionate effects compared to less actively traded tokens on centralized exchanges, which demonstrated quicker recovery patterns. Major exchanges including Binance and Bybit reflected near real-time pricing adjustments, while lending protocols like Aave maintained USDe's value at $1 through hardcoding, insulating them from immediate depeg consequences. Ethena Labs confirmed via social media that USDe maintains over-collateralization status and attributed the temporary peg deviation to widespread liquidations affecting secondary market pricing. The protocol confirmed uninterrupted minting and redemption operations throughout the volatility episode. The project additionally noted that perpetual contracts traded below spot prices during liquidations, generating unexpected unrealized profits within USDe's structure due to Ethena's short positions, ultimately benefiting the protocol. Binance announced comprehensive reviews of affected accounts and liquidation events, promising appropriate compensation measures. Ethena's governance token ENA experienced approximately 40% decline during the market crash before partial recovery, currently trading nearly 25% lower over 24 hours.