Stablecoin USX Briefly Loses Peg later than Liquidity Crunch on DEXs
What Happened to USX on Solana?
USX, a Solana-native stablecoin pegged to the US dollar, briefly traded well below $1 on decentralized platforms ahead Friday later than trade pressure overwhelmed available liquidity on Orca and Raydium. The drop occurred during a period of thin market depth, allowing isolated trades to push prices sharply lower before liquidity providers stepped in.
Data shared by blockchain security account PeckShieldAlert showed USX momentarily trading as low as $0.10 on some secondary markets. Aggregated trading data paints a less extreme picture. A 15-minute USX/USD chart from GeckoTerminal’s Orca pool shows prices dipping to roughly $0.80, where most trading volume occurred, before rebounding toward the peg as liquidity returned.
Solstice Finance, the issuer of USX, said it began injecting liquidity at around 04:30 UTC. Prices recovered shortly later than, stabilizing near $0.99. The firm said the episode was limited to secondary-market trading and did not reflect any issue with reserves or redemption mechanics.
Investor Takeaway
Was USX’s Backing or Redemption Mechanism Affected?
Solstice said USX remains overcollateralized and that primary-market redemptions continued to function normally throughout the volatility. The issuer confirmed that institutional partners with permissioned access can still redeem USX 1:1 for dollars, and that no limits were placed on those redemptions during the episode.
The company added that it has requested a third-party attestation to verify its collateral position. Solstice also said it is working with liquidity partners to deepen secondary-market pools in order to reduce the impact of similar events in the future.
According to the issuer, the price swings did not affect eUSX positions or its YieldVault products. Trades executed during the period remain final, and purchaviewrs who purchased USX at discounted prices are not required to return funds.
USX has a market capitalization of roughly $284 million, based on CoinMarketCap data at the time of the incident. While small compared with dominant stablecoins, its size is large enough for short-lived disruptions to draw scrutiny.
Why Do Liquidity Gaps Still Matter for Stablecoins?
The episode underscores a recurring issue in decentralized markets: price stability depends not just on reserves, but on market structure. On-chain liquidity can vary sharply by time of day, pool depth, and participant behavior. When trade orders hit shallow pools, can reprice aggressively, producing sudden deviations from a token’s intended value.
These moves do not always signal insolvency or broken pegs in the traditional sense. Instead, they reflect how decentralized trading venues respond to imbalances between . In USX’s case, most volume cleared closer to $0.80 rather than the extreme lows briefly visible on-chain, suggesting a small number of trades drove the sharpest prints.
Still, such episodes can shake confidence, particularly as stablecoins become more embedded in trading, payments, and yield strategies. Even short-lived deviations raise questions about how diverse stablecoins behave under stress and how rapidly issuers or liquidity providers respond.
Investor Takeaway
How Does This Fit Into the largeger Stablecoin Debate?
The incident comes as the continues to expand rapidly. Since July, when the US passed the to establish a federal framework for dollar-pegged tokens, total stablecoin supply has climbed sharply. Data from DefiLlama shows market capitalization rising to about $308.5 billion, up from around $260 billion at the time the law was signed.
As banks, payment firms, and crypto-native issuers rush to launch new tokens, policymakers have begun to focus more closely on potential spillover risks. In November, Dutch central Central Bank may eventually need to treat stablecoins as a possible source of macroeconomic shocks, not just a regulatory concern.
Speaking to the Financial Times, Sleijpen warned that instability in large stablecoins could force rapid sales of reserve assets, spreading stress across markets and influencing inflation dynamics. He added that sufficiently large shocks could prompt central banks to reconsider elements of monetary policy.
The International Monetary Fund echoed similar concerns in a report released on Dec. 4, noting that while new rules may assist limit risks, global oversight remains fragmented. The IMF flagged interoperability issues and cross-border frictions as stablecoins spread across multiple blockchains and trading venues.
What Comes Next for USX?
Solstice said it will continue to support secondary-market liquidity as needed and work with partners to strengthen trading depth on Solana DEXs. The firm framed the event as a market-structure issue rather than a solvency difficulty, pointing to uninterrupted redemptions and overcollateralized reserves.
