Viewpoint: The source of this massive liquidation may be the "USDE arbitrageurs' circular loan positions being liquidated".

On October 11, Vida, the founder of Equation News, posted on social media: "Not long ago, a fren told me there is a guaranteed arbitrage opportunity now, which is to do USDE circular loans on CEX, with an annualized interest rate of about 26%. The institutional friends he knows used 100 million USDT as principal to cycle into 500 million USDE for arbitrage on the CEX trading platform." Vida explained that this massive liquidation was speculated to be in a scenario of significant market decline under low liquidity: · The circular loan positions of USDE arbitrageurs were liquidated · Leading to a low USDE price · Resulting in the collateral capacity of USDE as a unified account collateral to decline · Triggering more positions of market makers using USDE as margin to be liquidated · Causing BNSOL and WBETH, these accumulated financial assets, to also hit the liquidation threshold. Although assets like BNSOL and WBETH have high collateral rates, their value is entirely determined by the order book, and under the conditions at that time, no one was willing to support them to maintain the peg, thus triggering a price collapse and more liquidations. It can be inferred that it is highly likely that some unified accounts used by market makers also got liquidated, which is why many small coins had extremely extreme prices.