Today, October 11, Binance announced a compensation plan for users affected by the latest events in the industry.
October 10 marked the biggest crypto liquidation event in history. This was also amplified by the price depegging of USDE, BNSOL, and WBETH, which resulted in forced liquidations that affected the asset positions of some Binance users. Earlier, the exchange revealed an update regarding the depeg of the three tokens.
Here’s what happened, Binance’s plans for affected crypto victims, and why we should remain optimistic.
Crypto Liquidations and the Current Market State
On October 11, the general crypto market is over $3.74 trillion, down by more than 9% in the past 24 hours, following the biggest liquidation in the history of the industry.
The 24-hour crypto liquidations are almost $19.3 billion. More than $16.78 billion in crypto longs were liquidated and $2.5 billion in shorts, according to CoinGlass data.
The same data shows that in the past 24 hours, more than 1.65 million traders were liquidated, and the largest single liquidation order happened on Hyperliquid.
Over $10.25 billion was liquidated on the DEX, with more than $9 billion in long positions and over $968 million in shorts.
Bybit recorded more than $4.63 billion in liquidations, with over $4.3 billion in longs and over $315 million in shorts. Binance saw over $2.39 billion in crypto liquidations, over $1.41 billion in longs, and over $982 million in short positions in the past 24 hours.
October 10 marks the biggest crypto liquidation day ever, bigger than covid and other events. Over $16 billion in long positions were liquidated yesterday, and more than $2.4 billion in shorts. Binance recorded the biggest crypto liquidations, according to CoinGlass data.
Binance has experienced high system load due to the intense market activity, but the issues have been resolved, according to the exchange’s notes on October 10.
USDe, BNSOL, WBETH Price Depeg
On October 11, Binance revealed that the recent price depeg of three tokens, USDe, BNSOL, and WBETH resulted in forced liquidations that affected the asset positions of some users.
These tokens were used in margin/futures/derivatives markets as collateral, synthetic positions, and hedges, and the sudden drop in their value triggered liquidations.
USDe briefly dropped to $0.99, BNSOL slipped to $102 levels before rebounding above $195 on October 11, and WBETH dropped to $876 levels before climbing above $4,097 today.
Binance’s Compensation Announcement
In its official announcement, Binance said that the team conducted a review of the:
- Impacted users
- Details surrounding liquidations
- Appropriate compensation measures
Also, the exchange worked to boost risk management controls to mitigate potential similar events in the future.
Binance noted that there is no need to contact or register with the customer service team, and asked users to remain patient as the exchange was working to resolve all issues.
Yi He also addressed the subject earlier, saying that due to the market fluctuations over the past day and a substantial influx of users, there have been issues regarding transactions, but a strong analysis is currently underway, and victims will be compensated based on individual account activity.
However, she noted that losses resulting from market fluctuations and unrealized profits are not eligible for compensation.
Yi He also said that Binance never shies away from problems and always takes responsibility, remaining committed to serving all users the best way possible. She finished her message by saying that the market remains volatile at the moment, and caution is needed.
A few minutes ago, the exchange released that following its review, it will compensate all impacted Futures, Margin, and Loan users in 72 hours, and the compensation will be automatically distributed to users’ accounts directly as follows:
- All Futures, Margin, and Loan users who held USDe, BNSOL, and WBETH as collateral and were impacted by the depeg between October 10 21:36 and 22:15 (UTC) will be compensated.
- The compensation amount will be the difference between the market price on October 11, 00:00 (UTC) and their respective liquidation price.
- Users who have other cases outside the ones specified above can contact the Binance customer support, submit their requests, and receive evaluations.
Binance’s Prevention Plan
In the same announcement, Binance revealed that in order to prevent recurrence, it will implement additional safeguards, and it adjusted relevant parameters:
- The redemption price will be added to the BNSOL, WBETH, and USDe price index weights.
- The USDe index rule will include a minimum price threshold to boost price stability.
- The frequency of risk control parameter reviews will be increased to ensure dynamic adjustments according to market conditions.
Uptober Expected to Resume Soon
Despite the huge crypto liquidation event on October 10, optimism must come back to the crypto market. The unfortunate event took place after Bitcoin reached a new ATH above $126,000 on October 6, sending the digital asset to $104,000 levels on October 11.
However, it’s important to highlight that at the moment of writing this article, Bitcoin has rebounded, and it’s currently trading above $112,000.
Zooming out, Bitcoin had the current price two weeks ago as well.
While some voices are maintaining FUD and saying that the industry is not reliable, it’s essential to see the bigger picture and note that Bitcoin is only 11% down from its ATH despite the industry being hit by the biggest liquidation event in its history.
This event came amidst huge geopolitical tensions, but Bitcoin is expected to see a rebound after flushing out the weak hands during the past days. The digital asset’s recovery from $104,000 today shows the first bullish signs.
It’s worth noting that an important announcement brought global optimism – folowing an important meeting in Egypt, there has been a ceasefire between Israel and Gaza.
Also, a new rate cut is expected from the US Fed this month, another bullish trigger for the market. Institutional interest in BTC continues, and global adoption is on the rise as well.
This is a great opportunity for accumulating more Bitcoin and crypto.
As Tron’s founder, Justin Sun, said earlier, unity is the most important thing in the crypto space, despite all volatilty, and more or less artificially orchestrated tragic events.
Overall, the market is expected to resume its uptrend after this “calculated reset,” as some voices in the industry have called this latest event.
