"The recent crash on Oct. 10 was the largest liquidation event in the crypto market's history. More than $19 B was liquidated, according to CoinGlass data, leading to a $65 B decline in open interest. This number dwarfs other memorable liquidation cascades such as the COVID-19 crash with $1.2 B, or even the FTX collapse at $1.6 B in liquidations. In the aftermath, consensus among investigators emerged that the event was at least partially caused by vulnerable pricing oracles on the Binance exchange."
"The collateral value of three pegged crypto tokens, namely USDE, bnSOL and wBETH, was determined from Binance's internal orderbook data instead of an external oracle. This puts users of the Unified Accounts feature at risk of liquidation during market irregularities. It is possible that this vulnerability was exploited in a coordinated attack on Oct. 10, but the evidence remains inconclusive. USDE, in particular, contributed to cascading liquidations with an approximate volume of $346 M, compared to wBETH with $169 M and bnSOL with $77 M."
"The mass withdrawal of buy-side liquidity on a stablecoin pair should be considered especially suspicious. Using exclusively obtained, granular data from our partners at the AI-driven market analytics firm Rena Labs, Cointelegraph Research dissects the unusual activity on the USDE/USDT trading pair in this article. A Mass Liquidity Meltdown Rena's anomaly detection engine recorded one of the sharpest and most complex market dislocations ever seen in stablecoin trading."
On Oct. 10, the crypto market experienced the largest liquidation event in history with over $19B liquidated and a $65B decline in open interest. The collapse vastly exceeded prior liquidation cascades such as the COVID-19 and FTX events. Vulnerable pricing oracles on Binance, which used internal orderbook data to price USDE, bnSOL and wBETH for Unified Accounts, contributed to mass liquidations. USDE accounted for roughly $346M of the cascade, wBETH $169M and bnSOL $77M. Massive buy-side liquidity withdrawals on the USDE/USDT pair precipitated sharp market dislocations detected by Rena Labs' anomaly engine.
Read at cointelegraph.com
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