Paolo Ardoino, chief executive of Tether, has seized on last week’s crypto market crash to tout the resilience of USDT, the world’s largest stablecoin, as rivals struggled to maintain parity. His remarks came after Ethena Labs’ synthetic dollar, USDe , briefly depegged amid the most severe liquidation cascade in the digital asset market’s history, which was triggered by President Donald Trump’s announcement of new tariffs on Chinese imports on October 10. In a post on X , Ardoino declared that “USDT is the best collateral for derivatives and margin trading. Liquid, tested by fire.” He added, in characteristic flair, that those using “low liquidity tokens, some bananas, a horse, 3 olives and a chewed bubblegum” as collateral should “brace yourself when the market moves.” USDe’s flash depeg exposes structural fragility Ethena Labs’ USDe, a $14 billion “synthetic” stablecoin ranked third by market capitalization, was among the hardest hit in the midst of the crisis. USDe maintains its dollar peg through a derivatives-based hedging structure that combines spot crypto holdings with offsetting short futures positions, which is very different from Tether’s USDT or Circle’s USDC, both fiat-backed by cash and Treasury reserves. Comparison of USDe’s dollar peg on Curve and Binance. Source: Guy Young ( @gdog97_ ) on X During the turmoil, USDe’s price on Binance plunged as low as $0.65 following what Ethena described as an internal pricing discrepancy in the exchange’s spot market. On-chain liquidity pools such as Curve, Fluid, and Uniswap, by contrast, showed only minor deviations, which weren’t up to 30 basis points, similar to spreads between USDC and USDT. Binance’s degraded performance exacerbated the dislocation. It affected BNSOL, the Binance-issued Solana liquid staking token, and WBETH, the wrapped Beacon liquid staking token. According to Guy Young , Ethena Labs founder, Ethena’s mint and redeem function processed “more than $1b in a few hours and $2b in a 24-hour period with zero issues.” Young post on X implied that the depeg was a Binance-specific glitch rather than a structural failure of USDe itself. He proposed improved oracle designs to prevent forced liquidations during short-lived price distortions and suggested that pegging to USDT rather than USD during periods of stress could have mitigated the incident. Binance’s chief executive officer, Richard Teng, later apologized for the performance of the platform and its impact on users during the heat of Friday’s market capitulation and promised to compensate affected users, acknowledging that “there are no excuses” for its performance during the event. Tether touts durability as rivals stumble For Ardoino, the incident provided an opportunity to contrast USDT with other players in the market. USDT, now with more than $179 billion in circulation, weathered the rout without deviation, a fact Ardoino was quick to highlight. His post fits within an effort to position Tether as crypto’s foundational layer of liquidity and reliability, following years of scrutiny over its reserves and transparency. Ardoino has made a point of emphasizing Tether’s conservative asset management and swift redemption record, describing the token as battle-tested. His comment on the other low-liquidity tokens is quite sardonic; however, the market appears to have validated his claim. After the crash: lessons in collateral and design The October 10 event has already entered crypto lore as the “Tariff Crash,” both for its geopolitical trigger and for the staggering $19 billion in forced liquidations it produced, the largest in digital asset history. Analysts say the sell-off exposed how heavily the market still depends on leverage and centralized pricing feeds. Ethena’s measured handling of redemptions earned it cautious praise from some investors, but the episode highlighted how even sophisticated hedging systems remain vulnerable to exchange-specific distortions. Calls are growing for decentralized oracles that derive prices from deep-liquidity pools rather than individual venues and for real-time proof-of-collateral monitoring to identify early signs of stress. Don’t just read crypto news. Understand it. Subscribe to our newsletter. It's free .
