Depeg

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Why I Was Liquidated Using bNSOL and wbETH, Even with a High Margin

This is an essential warning for anyone using Liquid Staking Tokens (LSTs) like bNSOL and wbETH as collateral for margin loans. My liquidation experience, despite having a "giant safety margin," proves that the risk is far more complex than a simple drop in the base asset (SOL/ETH).
The liquidation did not happen because $SOL or $ETH hit my liquidation price. It happened because the market value of my bNSOL and wbETH fell much faster than the base assets, consuming my safety margin in minutes.

The Crucial Lesson: The Double Risk of "De-Peg" 📉

The common mistake is underestimating the Liquidity and Centralized Custody Risk. When using LSTs as collateral, the total risk is not just market volatility, but the sum of two factors:
The Total Risk is the Sum:
Total Risk = Base Asset Price Risk + Collateral De-Peg Risk
Many investors assume that 1 bNSOL will always be worth the same as 1 $SOL (plus rewards). This is a fatal mistake during times of market stress. ⚠️

The Vicious Cycle That Causes Liquidation 🌪️

The reason the liquidation price was hit, even with SOL and ETH seemingly far from the limit, is that the Price Oracle Did Not See SOL/ETH, It Saw bNSOL/wbETH.
The failure cycle is fast and devastating:
Oracle Tracks Liquidity Discount: The lending platform calculates its LTV Limit (Loan-to-Value) using the current market price of your collateral (bNSOL/wbETH).The De-Peg Reduces Collateral Twice: When SOL and ETH are falling, confidence in the centralized entity (CEX) that issued the LST drops. Investors rush to sell LSTs at a steep discount (the de-peg) in their liquidity pools.Accelerated Drop: The value of your collateral falls abruptly:Drop 1: From the lower SOL/ETH price.Drop 2: From the discount applied to bNSOL/wbETH in the market (the de-peg). (Double Whammy!) 💥Immediate Liquidation Action: This fast, double drop consumes your "giant margin" in minutes. The liquidation bot acts instantly once the bNSOL/wbETH crosses the LTV limit, as the collateral is no longer sufficient to secure the loan. 🤖💸

Conclusion
The lesson is clear: the true liquidation price for LST users is defined by the point where the collateral de-pegs and hits the LTV limit – a point that is always more vulnerable than the base asset's price. When using bNSOL or wbETH as collateral, you must always consider CEX liquidity and custody risk as a separate and potentially devastating factor. #CryptoRisk #DePeg #LSTs

In a major move to protect user confidence, Binance has compensated its users with $283 million following the temporary de-pegging of three crypto assets on Friday.

The exchange confirmed that the incident was caused by market dislocations and liquidity imbalances, leading to short-term price instability across affected tokens. Binance quickly stabilized markets and reimbursed all impacted accounts through its internal User Protection Fund, reinforcing its commitment to transparency and trust.

Industry analysts praised Binance’s rapid response, noting that few exchanges can act at this scale — a reflection of its strong liquidity reserves and operational reliability.

This event underscores the importance of risk management and infrastructure resilience as the crypto market continues to mature.

Binance once again proves why it remains the global leader in user protection. ⚡

#Binance #crypto #blockchain #stablecoin #Depeg

After the strong fluctuations on 10/10 that caused some assets like USDe, BNSOL, and WBETH to lose their peg (depeg) and many accounts to be liquidated, Binance announced it would compensate affected users within 3 days.
A representative from Binance confirmed that each case will be considered individually, only damages caused by system errors or unusual fluctuations will be supported — excluding losses due to market conditions or unrealized profits.

📅 October 12 | Global
After a turbulent Friday that shook several crypto markets, Binance announced it had paid out $283 million in compensation to users affected by the simultaneous depeg of multiple stablecoin and token pairs. The company assured that the incident is "inexcusable" and reaffirmed its commitment to total customer protection.

📖 The episode originated when a series of peg losses affected dollar-pegged assets, generating automatic liquidations and significant losses for thousands of traders.
According to The Block, the incident was due to a failure in price synchronization and cross-liquidity in some secondary markets, which triggered a cascade of orders in a matter of minutes.
Binance's interim CEO stated:
“There are no excuses. Our goal has always been to protect users, and that includes responding when the system fails. We have compensated for all losses recorded in the affected markets.”
The total compensation amount amounts to $283 million, distributed among affected traders in the most affected pairs, including USDT/BTC, ETH/BUSD, and SOL/USDC.
Despite the blow, confidence in the exchange showed signs of recovery, with trading volume rising 7% in the following 24 hours.
Industry experts highlighted Binance's swift handling of the crisis:
"The move prevents a massive user exodus and reinforces its image of solvency, just as regulatory scrutiny is at its highest," noted a Kaiko Research analyst.

Topic Opinion:
Binance knows that its power no longer lies only in the size of its market, but in the trust it inspires when something goes wrong. This gesture—although costly—sends a clear message: the brand prefers to lose money rather than credibility.
These types of actions mark the difference between an opportunistic exchange and an institutionally responsible one. But they also raise the question: how many more times can it absorb blows of this magnitude without profound financial repercussions?
💬 Do you think Binance is really prioritizing its users?

Leave your comment...
#Binance #Depeg #CryptoNews #exchange #Stablecoins $BTC

Binance CEO Richard Teng has announced that the exchange will compensate users who lost money because of technical issues during last night’s extreme market volatility.
In his statement, Teng said:
“I’m truly sorry to everyone who was impacted. We don’t make excuses — we listen, learn, and will do better.”
He explained that Binance will only reimburse users for losses caused by Binance-related problems, not for normal market drops or unrealized profits.
💥 What Happened
Several tokens suddenly lost their normal value, or “depegged,” during the volatility. These included:
USDe – a stablecoin
BNSOL – Binance’s Solana liquid staking token
WBETH – Wrapped Beacon ETH staking token
🧩 Why It Matters
This move shows Binance’s effort to regain user trust after a night of major disruptions and ongoing regulatory pressure. By taking responsibility and offering compensation, the company hopes to show that user protection comes first.
Stay tuned for more details on how the compensation process will work.
#Binance #CryptoNews #RichardTeng #BNB #Depeg #Web3 #CryptoUpdate