Bitcoin News
By Maheen Hernandez
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What Are sUSDe Loop Trades?. Ethena’s sUSDe is a staked version of its synthetic dollar stablecoin, USDe, which earns yield by…
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Negative Carry Turns Profitable Trades Risky. Sentora Research warns that this delicate balance has now flipped.
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Threat of Liquidations and Market Impact. The report highlights that a prolonged negative spread between borrowing costs and sUSDe yields…
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Broader Implications for DeFi. The situation underscores a broader issue in DeFi: the fragility of leveraged yield strategies.
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Conclusion. The October Bitcoin crash has rippled far beyond spot prices, exposing the fragility of leveraged…
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The sharp downturn in the crypto market on October 10 has exposed significant vulnerabilities across the decentralized finance (DeFi) ecosystem.
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The crash, which saw Bitcoin (BTC) tumble to around $113,000 and triggered widespread liquidations across major tokens, has caused borrowing and staking rates in DeFi markets to…
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This newly acquired sUSDe is redeposited as collateral, allowing traders to repeat the cycle multiple times.
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In bullish market conditions, this strategy can produce strong returns. However, it also introduces high leverage and risk — particularly when borrowing costs rise or staking…
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Sentora Research warns that this delicate balance has now flipped. Following the October market crash, DeFi borrowing rates have increased while staking yields have declined,…
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“Following the flash crash on October 10, funding rates on DeFi markets have dropped significantly, cutting yields for basis-trade strategies,” Sentora wrote in a note shared…
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With yields now lower than borrowing costs, leveraged traders are effectively losing money each cycle instead of earning yield.
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The report highlights that a prolonged negative spread between borrowing costs and sUSDe yields could trigger a wave of forced deleveraging or collateral sales, which might…
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Sentora Research also noted that many existing positions on Aave and Pendle are approaching critical thresholds.
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This dynamic could set off a cascading effect, as liquidations further drive up borrowing costs and strain liquidity in lending pools — a cycle that could amplify price…
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