Solana-Based Synthetic Stablecoin USX Depegs: Lessons from the Depeg Crisis

Source: CoinEdition Original Title: Solana-based Synthetic Stablecoin USX Depegs; Is It a UST 2.0? Original Link:

Overview

• The Solstice USX temporarily lost its peg from USDC on secondary markets.
• The Solstice team stepped up to inject fresh liquidity to stabilize the USX token.
• The attack on USX is a stern reminder of the risks of engaging with synthetics in DeFi lending and borrowing.

Solana-based synthetic stablecoin Solstice USX (USX) temporarily depegged on Christmas Day 2025. The small-cap stablecoin with a fully diluted valuation of about $283 million dropped to as low as $0.1, a temporary crash that ended almost immediately after the Solstice team stepped in to intervene.

Secondary Market Liquidity Issue Addressed

According to the Solstice team, the USX stablecoin depeg was primarily caused by volatility in secondary liquidity rather than internal function errors. Moreover, the team stated that the custodied assets backing USX on the Solstice platform remained collateralized by more than 100%.

“This is purely a secondary market liquidity issue that both the Solstice team and our market makers are addressing immediately. We will continue to inject liquidity into the secondary markets to ensure stability,” the Solstice team announced.

As such, the Solstice team took the initiative to inject fresh liquidity to stabilize the USX stablecoin.

Impact on Solana Ecosystem

The Solana ecosystem, which has benefited heavily from yield offerings via USX, will bear the brunt of the burden. Moreover, the temporary USX depeg impacted users on major lending protocols such as Kamino Lend, who were liquidated of their positions.

The demand for synthetic stablecoin could drop further amid the notable rise in fiat-backed stablecoins, which are already regulated. Competing stablecoins are likely to capitalize on this loss and thus define their future growth prospects.

Rising Risks For DeFi Ecosystem

The DeFi space has remained a target for attackers. Reports indicate that November 2025 recorded 15 major crypto exploits, resulting in a total loss of more than $194 million. Furthermore, total losses in the DeFi ecosystem due to hacks surged by 10x month-over-month.

In December, the DeFi ecosystem continued to experience growth headwinds due to the exploitation of poor designs. Trust Wallet’s browser extension was exploited on Christmas Day, resulting in a loss of around $7 million.

The attack on USX ignited memories of the 2022 crypto bear market, which was catalyzed by the collapse of Terra Luna UST. According to market data, the total value locked in Solstice USX declined by $10 million, while its 24-hour trading volume surged by 546% to around $18 million.

The rush for Solstice users to exit the market could trigger further bearish risk in the midterm. Moreover, user confidence in USX as a synthetic stablecoin was eroded.