Whale Gambles $800K on USDX Depeg, Awaits Redemption Payout

USDX Depeg: Whale Snags $800K Opportunity, But Profit Uncertain

In an astounding development, a whale has taken a huge gamble on USDX depeg, spending $800,000 on the stablecoin. As the token depegged to $0.3887, the investor bought 933,241 USDX at $0.8572, hoping to cash in on a potential redemption payout.

But with token still struggling to recover from its plunge, the investor's potential $135,000 profit hangs precariously in the balance. This risky venture has brought to light the increasingly worrying issues related to the reliability and safety measures of DeFi, which have also raised doubts regarding the sustainability of synthetic stablecoins.

USDX Depeg Drama: Will the Whale Bet Payoff?

According to a recent X post by Lookonchain, USDX, a synthetic USD stablecoin bridging DeFi, CeFi, and TradFi, has dropped its USD peg. While the token plummeted to around $0.3887, a whale swiftly accumulated 933,241 cryptos at $0.8572, following an earlier purchase of 1.4 million last week. With all tokens submitted for redemption, the whale 0xe454 is poised to net a $135,000 profit if successful. However, despite a three-hour wait, the redemption process remains pending.

The result of the whale's risky gamble is still not known, as the USDX's future is still to be decided. The crypto community is observing the situation very closely, the USDX depeg giving rise to important discussions about the stability of synthetic stablecoins and the effectiveness of risk management techniques in the DeFi sector.

What Happened to the Synthetic Stablecoin?

On Thursday, Stable Labs’ USDX experienced a significant depeg, with its value plummeting below $0.60. Lista DAO and PancakeSwap had promised to tackle the situation. Lista DAO wrote, “We are aware and have been closely monitoring the MEVCapital USDT Vault and Re7Labs USD1 Vault, where collateral assets continue facing abnormally high borrowing rates without repayment activity.” At the same time, PancakwSwap stated,

“Our team is also aware of the situation involving the affected vaults and is monitoring it closely. Please review and monitor your positions involving these vaults on PancakeSwap. We’ll continue to stay updated and share information as needed.”

However, the USDX depeg worsened, with the stablecoin shedding value and hitting a low of $0.3887. As the token continues to plummet, the prospects of its repegging remain uncertain, with many raising concerns.

What Led to the Depegging?

While the exact reason for the incident is unknown, many believe that the Balancer exploit is one of the main culprits. Depeg connoisseur Luke Chmiel stated, “Looks like…hit by the Balancer exploit for $1M, but there may be something deeper going on as it has now depegged to 0.825, shedding $120m of market cap in the last few hours.” Chmiel added,

“On Monday, the Stable Labs team announced they would plug the hole from the exploit but also decided to limit cross-chain bridge flow rates and removed liquidity from Arbitrum and Base. Seems like its been crickets since then, with no updates for users who were told that their funds were safe and that cross-chain liquidity would be restored.”

The fate of the stablecoin hangs in the balance as scammers pounce on the situation. Fake recovery schemes are being peddled via Stable Labs' X post, and anxious users are clamouring for answers.