TLDR
- Tether’s CEO, Paolo Ardoino, emphasized the stability during the recent market crash, contrasting it with the struggles of its rivals.
- Ethena Labs’ synthetic stablecoin USDe briefly depegged during the market turmoil, losing its dollar parity on Binance.
- USDT maintained its dollar peg on decentralized platforms like Uniswap and Curve, showing resilience amid the market collapse.
- Ethena Labs blamed Binance’s internal pricing issue for USDe’s depeg, highlighting exchange-specific glitches rather than structural problems.
- Tether’s conservative asset management and swift redemption process helped USDT withstand the market’s volatility without deviation.
Tether CEO Paolo Ardoino highlighted the stability of USDT during the recent market crash. As rivals struggled, USDT held its ground. This stability contrasted with Ethena Labs’ synthetic stablecoin, USDe, which faced significant issues. Ardoino used the opportunity to tout USDT’s resilience, calling it the most reliable collateral for derivatives and margin trading.
USDT is the best collateral for derivatives and margin trading.
Liquid, tested by fire.If you use as collateral low liquidity tokens, some bananas, a horse, 3 olives and a chewed bubblegum, then brace yourself when market moves.
— Paolo Ardoino 🤖 (@paoloardoino) October 12, 2025
USDe Depegs Amid Market Chaos
Ethena Labs’ USDe, a synthetic stablecoin, faced a significant depeg during a market downturn. The crisis began on October 10, following President Donald Trump‘s announcement of tariffs. USDe, ranked third by market capitalization, briefly fell to $0.65 on Binance. Ethena Labs attributed this to an internal pricing issue on the exchange’s spot market.
While USDT experienced minor fluctuations, other stablecoins like USDC saw significant turbulence. On decentralized platforms like Uniswap and Curve, USDT maintained its dollar peg without substantial deviation. These platforms showed only slight discrepancies, much smaller than USDe’s plunge, which demonstrated the resilience of USDT in comparison.
Ethena’s founder, Guy Young, downplayed the event, suggesting it was Binance-specific rather than a flaw in USDe’s structure. He proposed improvements to oracles to prevent similar issues in the future. Additionally, Young argued that pegging USDe to USDT during times of stress could have prevented the incident.
While we share these suggestions privately with any partner we work with across both DeFi and CeFi, want to surface this publicly so there is zero doubt going forward on what we view as appropriate oracle design and risk management for USDe: pic.twitter.com/lb4OeaGn9Y
— G | Ethena (@gdog97_) October 12, 2025
USDT Proves Resilient in Crypto Market Collapse
While USDe struggled, Tether’s USDT proved to be the stablecoin of choice during the crisis. USDT remained unaffected during the October 10 market crash, maintaining its dollar peg. Ardoino was quick to emphasize this, declaring that USDT is “tested by fire” and the “best collateral” for margin trading.
Tether’s conservative asset management strategy was also a key point of pride for Ardoino. With over $179 billion in circulation, USDT has earned its reputation as the most reliable stablecoin. It held its value through the crash, while other tokens faced liquidity challenges.
This event highlighted how USDT has become a cornerstone of crypto liquidity, with many users relying on its stability. Ardoino took the opportunity to contrast USDT with other tokens, emphasizing the importance of liquidity during volatile market conditions. He mocked the use of “low liquidity tokens” as collateral, warning users of the risks involved.
Calls for Improved Market Infrastructure
The October 10 crash, which resulted in $19 billion in forced liquidations, exposed vulnerabilities in the crypto market. Analysts noted that the event highlighted the continued reliance on leverage and centralized pricing feeds. The crisis also underscored the importance of decentralized oracles for price discovery.
The reliance on centralized platforms, such as Binance, led to significant market distortions during the crash. Ethena Labs’ handling of redemptions, despite the glitches, was praised for its efficiency. However, the incident demonstrated how even sophisticated systems could falter under exchange-specific distortions.
In the wake of this event, calls are growing for decentralized price oracles and real-time proof-of-collateral systems. These systems would help identify market stress early, providing greater stability to the crypto ecosystem. The resilience of USDT, however, proved that well-established stablecoins continue to play a vital role in maintaining market confidence.
