Curriculum·S201 Market Structure and Price Formation·about 31 min
Price across venues
By the end of this lesson you can
- →Explain why one asset has many prices, and what has to be true for them to converge
- →Identify the frictions that let a dislocation persist, and which of them are structural
- →Trace which price a given system consumes, and what happens when that venue is the thin one
- →Check a quote against an independent venue before acting on it
Sophomore · enrolled learners
This lesson opens with The USDe dislocation on Binance, October 2025.
- What happened
- During the deleveraging event of 10 October 2025, USDe traded as low as about $0.65 on Binance. Binance compensated futures, margin and loan users who held USDe and two other affected assets as collateral and were hit by the depeg between 21:36 and 22:16 UTC, about $283M in total. Over the same period the asset moved only about 0.3 percent on Curve, where its deepest liquidity sat, and touched about $0.95 on Bybit before recovering within minutes. Ethena's founder and on-chain analysts attributed the deviation to Binance pricing USDe from an index on its own thinly traded order book rather than from the deepest external markets, so positions collateralized by USDe were valued and liquidated at the local price; Ethena's founder added that deposit and withdrawal problems on the exchange kept market makers from closing the gap. Ethena's mint and redeem operations stayed open, and its founder said about $2B of USDe was redeemed over 24 hours. Binance said it would add each affected asset's redemption price to its index weights and put a floor under USDe's reference index.
- The decision point
- On our reading, and Ethena's, there was no depeg in any meaningful sense. Minting and redemption stayed open throughout, and the asset was trading close to a dollar on its deepest markets. What failed is that a risk engine consumed a price from a single venue's own book, and that book was thin enough that the liquidations it triggered moved it further, which triggered more.
What you will be able to answer
- →Why does one asset have many prices?
- →What determines whether a dislocation closes?
- →What is the question to ask of any risk engine?
- →What did the USDe episode demonstrate?
Orientation and Year One are open: anyone can read them without an account. From Year Two onward the lessons are for enrolled learners, because progress through the later years only means anything if it is tracked against a record.
It is free. We do not sell the list and there is nothing to buy at the end of it.
Sources and review
- https://www.21shares.com/en-eu/insights/why-did-ethenas-stablecoin-remain-stable-onchain-but-depegged-on-binance
- https://www.ccn.com/education/crypto/ethena-usde-depeg-binance-crash-explained/
- https://protos.com/binance-usde-depeg-exchange-millions/
- https://cointelegraph.com/news/usde-depeg-oracle-issues-ethena-founder
- https://www.theblock.co/post/374295/binance-pays-283-million-in-compensation-following-fridays-depegs-covering-user-losses
- https://corpgov.law.harvard.edu/2019/09/21/trading-and-arbitrage-in-cryptocurrency-markets/
- https://doi.org/10.1016/j.jfineco.2019.07.001
- https://www.sec.gov/newsroom/press-releases/2023-13
Confidence medium·Volatility high·Reviewed 2026-10-22·Owner unassigned
Contested
Whether the Binance USDe move was purely a mechanical oracle and liquidity failure or involved deliberate targeting was debated at the time and has not been definitively resolved: a trader, ElonTrades, speculated that a coordinated attack exploited Binance's Unified Account pricing, and Cointelegraph reported it as speculation. Binance's own account is that the market as a whole bottomed between 21:20 and 21:21 UTC and the severe depeg came after 21:36, so it presents the depeg as a result of the crash rather than a cause. The mechanical account is well supported and the lesson rests on it; note that the alternative readings exist.
Whether to call it a depeg is itself contested. CoinDesk Research reported that USDe depegged to $0.65 on Binance; Ethena, 21Shares and CCN argue it was a venue-specific dislocation. The lesson takes the second reading and says so. The $2B redemption figure is Ethena's founder's claim; an analyst quoted by CCN put it at over $1B. CCN also notes that Binance lacked direct mint and redeem access, which is part of why its book could not be arbitraged back quickly.
Exact low prints and durations differ between accounts, partly because they depend on which order book and which timestamp is used, which is itself the lesson. Quote figures as reported and attach the venue.
Pricing sources used by any specific venue's risk engine change, and the exchange in this case said it would add redemption prices to its index weights and a floor to the USDe reference index. Do not describe any named venue's current oracle configuration as fact; teach the question.