USDE Stablecoin Plunges 15% Amid Liquidity and Redemption Crisis

USDE, a leading algorithmic stablecoin, tumbled 14.99% in 24 hours on September 25, 2025, breaking its dollar peg at $0.9992. The collapse exposes critical flaws in its multi-asset reserve model, with weekly and monthly losses deepening to 13.99% and 15.99% respectively.

Investors rushed for exits as redemption demands overwhelmed the stablecoin's liquidity buffers. Unlike traditional dollar-backed peers, USDE's complex reserve mechanism faltered under pressure, raising existential questions about its design. "When trust evaporates, algorithmics unravel fastest," remarked a veteran trader watching the selloff.

The crisis reverberated across crypto markets, though major assets like BTC and ETH remained insulated. No centralized exchanges including Binance or Coinbase reported contagion effects, but decentralized finance protocols using USDE faced immediate valuation shocks.