Opinion: The source of this large-scale liquidation may be the "USDE Arbitrageurs' Flash Loan Position Liquidation".

BlockBeats News, October 11th, Formula News founder Vida posted on social media, saying: "A friend told me some time ago that there is currently a risk-free arbitrage opportunity, which is to engage in USDE flash loans on Binance, with an annualized interest rate of around 26%. An institutional friend he knows turned 1 billion USDT principal into 5 billion USDE through flash loans on the Binance trading platform."

Vida explained that this massive liquidation event was speculated to have occurred in a scenario of a significant market downturn with low liquidity:

· The USDE flash loaner's leverage position was liquidated

· Resulting in a low USDE price

· Causing a decrease in the collateralization ratio of USDE as the unified account collateral

· Triggering more liquidation of market makers' positions collateralized with USDE

· Triggering a liquidation of assets such as BNSOL and WBETH, which are used for yield farming.

Assets like BNSOL and WBETH have a high collateralization ratio, but their value is entirely determined by the market price. Under the prevailing conditions, no one was willing to bottom fish to maintain the peg, leading to a price collapse and more liquidations. It can be inferred that a high probability of some market makers using the unified account also got liquidated, resulting in many small coins experiencing extremely volatile prices.