After yesterday's article, I instantly felt relieved.
Because among our fans, it seems that not many are into defi. This means that very few people got wiped out in this wave, and you won't come to me crying.
But this matter still needs to be discussed, on one hand, the background and on the other hand, the current situation and its impact on the future.
The beginning of this matter still goes back to the 1011 epic liquidation, where institutions, large holders, and market makers were directly wiped out.
Note, it's not that a lot was lost, it's that it was directly gone.
A few days ago, balancer was hacked for 100 million dollars, directly breaching the protocol's treasury, causing panic in the market.
Then, immediately, XUSD and USDX started to explode, leading to the direct collapse of DeFi platforms and protocols.
The impacts experienced above have already been very exaggerated, but industry practitioners say: this is just the beginning.
According to the scope and potential impact of this incident, the explosion amount could reach $8 billion.
On one hand, this is the floating corpse that surfaced after the 1011 deep-water bomb.
On one hand, people have also overestimated the quality of practitioners in this industry.
Originally, it was the superficial high yield and prosperity on the chain; everyone was at their ATH.
But after experiencing a black swan event in the industry, it began to explode like a string of firecrackers; the toxic assets in this stablecoin link are just the first sound of the explosion.
Now, the entire Twitter is filled with pessimistic sentiments about DeFi, and the reason is simple: this kind of explosion in links that have already penetrated the daily operations of cryptocurrency people is equivalent to everyone having an indiscriminate bomb beside them. When stablecoins explode with the decline of meme coins, how can people not be fearful?
Fortunately, a while ago, Juzi withdrew the deposits on the chain. After communicating with friends, Juzi urgently extracted assets from platforms that hadn't exploded last night for emergency risk avoidance.
At the moment the funds arrive, you can't imagine how relieved I felt.
Why do we say this explosion could still involve $8 billion?
Because the assets that everyone redeems are native assets, such as USDT, USDC, and the like.
However, the assets on DeFi platforms, although they are also stablecoin assets, are mostly collateralized derivative assets, which can easily be magnified by 3 times through a loop loan, while the already exploded XUSD has reached 4 times.
So you can understand that every time $100 million of native assets is redeemed from the chain, it is equivalent to $300 million of TVL disappearing from DeFi.
Currently, many projects have actually encountered substantive problems, but they choose to keep it a secret — because as long as it is not publicly exposed, they can still struggle to keep going.
Once exposed, there is only a dead end — currently, no project in the cryptocurrency circle can escape this law, not even FTX, because it is essentially no different from a bank run.
What’s more, now due to the explosions of these projects, speculators like me have started panic withdrawals. Currently, I don’t want on-chain returns; I only want to ensure the safety of my principal, and I won’t participate in on-chain projects for a short time.
I dare say there are quite a few speculators who share the same thoughts as me — and this has led to a substantial liquidity withdrawal, which will also rip off the last layer of cover from some high-risk projects.
So the estimate of $8 billion is not particularly outrageous, and it is certain that many projects have already died in substance; they are just trying to find ways to ease the situation or deal with the aftermath.
It's just like someone asking on Twitter today:
The entire industry's ecological roles have been exposed, so who still has money now?
If the people in the industry have no money, will it be friendly to the market?
However, we have also synchronized this information in the group and promptly reminded members to evacuate early; even last night, Juzi was teaching members how to recover assets as much as possible.
Even DeFi can have a chain reaction of explosions; who would dare to play in this industry?
The tuition you can actively pay in the cryptocurrency circle is the cheapest.
Because every pit in the cryptocurrency circle cannot be bought back with tuition.
Now purchase a membership to participate in the hands-on training camp on the 22nd, as well as subsequent exciting offline activities.
(2025.11.8 article)
