Solana’s USX Stablecoin briefly plunged to just $0.10 following a severe liquidity crunch, before rapidly recovering after intervention by its issuer, Solstice Finance.
Key Takeaways
- USX, a Solana-native stablecoin, dropped to $0.10 on decentralized exchanges due to an unexpected liquidity crisis.
- Solstice Finance quickly injected liquidity, restoring USX’s value close to its $1 peg within hours.
- The drop occurred only in secondary markets, while primary systems and collateral remained fully secure and over 100% backed.
- This marks one of 2025’s most dramatic stablecoin depegs, reigniting concerns over systemic risks in decentralized finance.
What Happened?
USX, a US dollar-pegged stablecoin issued by Solstice Finance on the Solana blockchain, experienced a dramatic price drop on December 26. Following a liquidity drain on Solana-based decentralized exchanges like Orca and Raydium, the stablecoin briefly fell to as low as $0.10, prompting panic among traders and renewed scrutiny of stablecoin resilience.
Solstice and its partners quickly responded, injecting new liquidity to stabilize the asset. As of the latest data, USX is trading around $0.995, nearly back to its intended $1 peg.
We are aware of some major volatility in the secondary market for USX tonight.
— Solstice (@solsticefi) December 26, 2025
The Solstice team can confirm the underlying NAV and the custodied assets backing USX on the Solstice side remain entirely unaffected and >100% collateralized. We have requested an immediate and…
Secondary Market Crash Triggers Alarm
The sudden depeg was first flagged by blockchain security firm PeckShield, which highlighted abnormal trading activity during early hours on Friday. On-chain data shows that the sharp drop in USX’s price stemmed from an extreme lack of liquidity, allowing isolated trades to execute at unusually low prices.
While aggregate data showed most trading occurred around $0.80, some trades fell as low as $0.10. This made it one of the steepest and fastest depegs for a major stablecoin in 2025.
- Trading volume for USX surged by 500 percent, reaching $17 million during the event.
- The price briefly touched an all-time low of $0.8285 before rebounding.
Solstice Steps In to Restore Stability
Solstice Finance, the developer behind USX, acted swiftly to inject fresh liquidity into secondary markets starting around 04:30 UTC. In multiple public statements, the company clarified that the primary reserves of USX were entirely unaffected, and that 1:1 redemptions remained operational throughout the event.
They also emphasized that the asset remains over 100 percent collateralized, and committed to obtaining a third-party attestation to independently verify the reserves.
Solstice stated:
The company also noted that institutional partners with permissioned access continued to redeem at face value, and that internal products like eUSX and YieldVaults were unaffected by the volatility.
A Broader Risk for the Stablecoin Market?
USX’s depeg adds to a growing list of stablecoin incidents in 2025, raising red flags about liquidity infrastructure across decentralized finance. Previous examples this year include:
- sUSD falling below $0.70 in April after protocol changes at Synthetix.
- XUSD collapsing to $0.30 in November due to a $93 million external fund loss at Stream Finance.
What makes the USX case stand out is that the underlying collateral remained intact, suggesting a purely market structure-driven disruption. Yet, the sharp price movement has unnerved traders, especially given the absence of broader crypto market volatility during the event.
The incident also lands amid a global reassessment of stablecoin risks. The International Monetary Fund and European Central Bank have recently warned that large-scale stablecoin instability could pose macroeconomic risks, particularly as dollar-pegged tokens become more intertwined with traditional finance.
CoinLaw’s Takeaway
In my experience, this kind of sharp price dislocation, even when backed by solid fundamentals, shows just how fragile the current DeFi liquidity layer really is. The fact that USX could collapse to $0.10 despite being fully collateralized underscores a critical lesson: trust in stablecoins doesn’t just depend on backing, but on the ability to trade out of them quickly. I found Solstice’s fast response reassuring, but the damage to confidence may take time to repair. For anyone active in DeFi, this is a wake-up call to closely watch liquidity depth, not just collateral ratios.
