Insight: Market Oracle Price + High Collateralization Ratio Lead to USDe Following in UST's Footsteps, LSD Assets Face the Same Issue

BlockBeats News, October 11th, Founder of DeFi protocol dForce, Mindao, posted on social media stating that the similarity between this plunge and Luna's sudden crash is that both occurred when major exchanges began accepting non-pegged stablecoins as high LTV collateral, causing risks to spread across exchanges. At that time, it was UST; today, it is USDe. The combination of "stability" and high collateralization rate has misled most people.

When introducing non-pegged stable assets as collateral, the worst combination is to use market price as the oracle price while allowing a high collateralization rate. Additionally, if the CEX itself does not have a fully open arbitrage environment, arbitrage efficiency is low, further amplifying the risk. LSD-like assets face the same issue. These assets are essentially volatile assets disguised in the cloak of "stability."