Solana's USX stablecoin briefly drops to $0.80 after liquidity loss on DEX

2025-12-27 01:26:31

Source: Yellow Original Title: Solana’s USX Stablecoin Briefly Drops to $0.80 After Liquidity Loss on DEX

Original Link: Solana’s stablecoin USX fell to $0.80 on December 26, followed by liquidity exhaustion on a decentralized exchange.

This decoupling lasted about an hour, after which Solstice Finance injected emergency liquidity to restore parity.

Solana’s native synthetic stablecoin recovered to approximately $0.99 after intervention.

Solstice claims that the underlying collateral remains intact and redemptions continued normally throughout the event.

What Happened

USX began losing its peg to the dollar around 1:45 AM UTC, as selling pressure exceeded available liquidity on Orca and Raydium.

Blockchain security firm PeckShield identified this situation shortly after the decoupling started.

Solstice Finance responded around 4:30 AM UTC by injecting liquidity into the affected trading pools.

The protocol confirmed that its net asset value remained unchanged, and collateralization ratios stayed above 100% throughout the event.

The company stated that 1:1 redemptions through the primary market continued to operate smoothly.

Primary market participants can directly mint and redeem USX with the issuer at face value, while the secondary market involves trading on exchanges with prices fluctuating based on supply and demand.

Why It Matters

This incident exposes vulnerabilities in how new stablecoins maintain stability during periods of limited liquidity.

Holiday trading conditions amplified the impact, as fewer market makers and liquidity providers remained active.

USX was launched in September 2025, supported by Deus X Capital, Galaxy Digital, and Bitcoin Suisse.

The protocol initially secured a total locked value of $160 million and currently maintains a market cap of about $310 million.

Solstice has committed to releasing a third-party audit report but has not specified a timeline.

The protocol stated it is working to deepen secondary market liquidity to prevent similar incidents during large withdrawals.

SOL0,48%

ORCA0,32%

RAY1,81%

BTC0,28%

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