DeFi's Stability Test: USDX Redemption Stumble Exposes Systemic Risks

A whale investor spent $800,000 in USDT to purchase 933,241 units of Stables Labs' USDX stablecoin after it depegged from its $1 value, dropping to as low as $0.3887 on November 6, 2025, according to a CryptoTimes report. The wallet address 0xe454, identified as a major player in the market, executed the trade at an average price of $0.8572 per token, a move seen as a bet on USDX's potential to recover its peg. However, the investor's attempt to redeem the tokens for cash has stalled for over three hours, raising concerns about the stability of the stablecoin and the efficiency of its redemption process.

The redemption delay has intensified scrutiny of USDX's mechanics, particularly as the same whale previously purchased 1.4 million USDX during a similar depegging event a week earlier. Both batches were submitted for redemption, with the latest transaction expected to yield a $135,000 profit if completed, the CryptoTimes report said. The hold-up, however, has sparked speculation about technical glitches, liquidity shortages, or systemic stress within the protocol. Stablecoins typically allow instant redemptions, and prolonged delays are rare but not unheard of in volatile markets.

The turmoil has coincided with an emergency governance vote by Lista DAO, a decentralized autonomous organization managing lending protocols, to force the liquidation of USDX-related positions, an action detailed in an Investorempires article. The vote, labeled LIP 022, aims to address abnormally high borrowing rates—peaking at 800%—in vaults managed by MEV Capital and Re7 Labs, which are linked to Stables Labs. As of press time, 18 veLISTA token holders had voted in favor of the proposal, which would adjust USDX's oracle price to trigger liquidations and mitigate further losses. MEV Capital has responded by capping allocations to zero in the affected markets and revising interest rate models, while PancakeSwap advised users to monitor exposure to related liquidity pools.

The USDX saga has drawn parallels to the 2025 collapse of Stream Finance's xUSD stablecoin, which depegged to $0.33 after a $93 million loss tied to external fund managers, according to a Blockonomi analysis. Analysts warn that cross-collateralized lending structures, as seen in platforms like Morpho and Euler, amplify risks when synthetic stablecoins lose value. The xUSD incident exposed $284 million in interconnected DeFi debt, highlighting fragility in high-yield ecosystems, according to a Markets report. Duo Nine, a DeFi expert, emphasized the need for stronger collateral diversification and transparency to prevent cascading failures.

With USDX's redemption process unresolved and Lista DAO's vote pending, the market remains on edge. The outcome could set a precedent for how DeFi protocols manage stablecoin crises, balancing user protections with systemic stability.