USDE -12.99% in 7 Days Amidst Liquidity Concerns

On SEP 21 2025, USDE rose by 0% within 24 hours to reach $0.9995, USDE dropped by 12.99% within 7 days, dropped by 12.99% within 1 month, and dropped by 12.99% within 1 year.

Recent on-chain data reveals a sharp decline in USDE’s collateralization ratio, triggering concerns over its stability as a stablecoin. The metric, which measures the ratio of overcollateralized assets to USDE in circulation, has fallen to its lowest level since late 2024. This decline correlates with a drop in the number of active custodians and an increase in redemption requests, both of which point to a potential liquidity mismatch. The trend has led to increased scrutiny from institutional investors and algorithmic monitoring systems.

The technical breakdown has been accompanied by a series of governance updates. A recent proposal to introduce a dynamic reserve ratio to address volatility was approved by a majority of token holders. The mechanism is designed to adjust the amount of collateral required in real time, based on market conditions and redemption pressure. While the proposal has not yet been implemented, it signals a shift in the protocol’s risk management strategy.

The backtesting strategy focuses on validating the proposed dynamic reserve ratio model by simulating historical redemption scenarios over the past 12 months. The model is tested under different volatility conditions to assess its ability to maintain peg stability and prevent depegging. Initial simulations indicate that the dynamic reserve approach could reduce the likelihood of a 1% depeg by up to 40% during high-pressure redemption events. The results are being reviewed by the protocol’s technical advisory board before final deployment.