USX, a Solana-based stablecoin pegged to the US dollar, briefly dipped below its peg on decentralized exchanges early Friday due to intense sell pressure that outstripped available liquidity on Orca and Raydium. This prompted issuer Solstice Finance to provide liquidity support.
PeckShieldAlert revealed in an X post on Friday that USX traded as low as $0.10 in secondary markets before bouncing back, a move linked to isolated trades made during a period of very limited liquidity.
Aggregated DEX data indicates a less dramatic move. A 15-minute USX/USD chart from GeckoTerminal’s Orca pool illustrates USX dipping to around $0.80, where most trading volume occurred, before recovering and stabilizing near $0.99 as liquidity returned.
Solstice announced liquidity injections began at 04:30 UTC, after which prices moved back toward the peg. The company stated it would continue supporting secondary markets as necessary. It confirmed that USX’s reserves were overcollateralized, that primary market redemptions were unaffected, and it has sought a third-party attestation to verify its collateral.
The issuer indicated that 1:1 redemptions are still available to institutional partners with permissioned access and is collaborating with partners to enhance secondary-market liquidity to mitigate future impacts from similar events.
Solstice also noted that the price fluctuations did not impact eUSX positions or its YieldVault products, and trades conducted during the incident are considered final, meaning that buyers who acquired USX at lower prices aren’t obligated to return funds.
USX, a Solana-native stablecoin pegged to the dollar, is issued by Solstice Finance and currently holds a market cap of approximately $284 million, according to CoinMarketCap data at the time of writing.
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The potential risk facing stablecoins
The global stablecoin market has surged since July, following the passage of the GENIUS Act in the US, which aims to establish a regulatory framework for dollar-pegged tokens. While banks, payment companies, and crypto-native firms rush to enter the market, critics caution that the rapid growth of stablecoins may introduce new financial stability risks.
In November, Dutch central bank governor Olaf Sleijpen suggested that the European Central Bank may eventually need to consider stablecoins as potential sources of macroeconomic shocks rather than just regulatory issues, as dollar-pegged tokens become more integrated into the financial system.
During an interview with the Financial Times, Sleijpen warned that instability in stablecoins might result in rapid liquidation of reserve assets, exacerbating stress across markets and potentially impacting inflation, suggesting that significant shocks could compel the ECB to reconsider monetary policy.
On Dec. 4, the International Monetary Fund, the global body monitoring economic stability, issued a report analyzing the swift growth of the stablecoin market and outlining how major regions like the US, UK, Japan, and the European Union are regulating it.
The IMF indicated that while new regulations could help alleviate macrofinancial risks, global oversight remains fragmented, warning that the proliferation of stablecoins across various blockchains and exchanges may lead to interoperability issues and cross-border conflicts.
According to Defillama data, the stablecoin market cap stands at $308.5 billion, rising from roughly $260 billion on July 18, when the GENIUS Act was enacted.
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