The Ultimate 10/10 Crash Autopsy
Olivia Capozzalo & Camila Russo
October 14, 2025
gm, Defiers!
Today’s big story:
- How Binance and Hyperliquid cracks fueled the biggest liquidations wipe-out in crypto history
In other news:
- MetaDAO community votes against VC token sale
- UMBRA trades almost 5x above its ICO price
- Russia’s central bank considers tokenizing stocks
- Who really controls your blockchain? [SPONSORED]
📈 Markets in the Past 24 Hours
| TICKER | VALUE | 24H | |
|---|---|---|---|
 | Bitcoin | $112,605 | -1.92 % |
 | Ethereum | $4,133.68 | -0.94 % |
 | BNB | $1,222.47 | -4.60 % |
 | XRP | $2.52 | -3.00 % |
 | Solana | $203.99 | 2.25 % |
Today’s Big Story
The Ultimate 10/10 Crypto Crash Autopsy
Many are pointing fingers at Ethena, Binance, Hyperliquid, and even Donald Trump, hoping to find the one culprit behind the 10/10 crash. We scoured through all the post-mortems so you don’t have to. The truth is, they all played a part.
It started with a shock. On Friday, Oct. 10, late U.S. hours, President Trump dropped a political bomb: A 100% tariff on Chinese imports, effective November 1. That kind of escalation, unannounced and sweeping, rippled immediately through global risk markets. Crypto was not exempt. In less than 24 hours, over $19 billion in leveraged positions were liquidated, across more than 1.6 million accounts (per Coinglass). 
But that headline alone wouldn’t have triggered the full cascade; it was the structural fragilities beneath that made the system crack. Here’s where each actor (and architecture) failed.
The Hyperliquid Implosion
If Trump’s tariff tweet was the match, Hyperliquid was the barrel of gasoline.
In the days leading up to the crash, Hyperliquid had become the most leveraged venue in crypto. According to Laevitas, its open interest peaked around $15.4 billion, more than double Binance’s BTC perps and representing roughly a third of total market OI. Funding rates were aggressively positive; traders were paying 70–80 bps per day just to stay long.
When BTC dropped through $120,000, those long positions began to unravel. As Galois Capital and yq_acc noted in their post-mortems, once margin calls exceeded the exchange’s liquidation buffer, Hyperliquid’s Auto-Deleveraging (ADL) kicked in and forcibly closed profitable short positions to offset losses from bankrupt longs.
The mechanism spiraled: liquidations pushed prices lower, triggering even more liquidations, which triggered more ADLs. By the end of the day, Hyperliquid’s open interest had collapsed by 60%, wiping out nearly $9 billion in contracts.
The Binance “Technical Glitch”
Then came the blowback from Binance, the biggest crypto trading venue in the world, whose risk engine buckled right when traders needed it most.
At the peak of the volatility, Binance’s Unified Account System, which allows users to cross-margin positions using multiple assets, began marking collateral to market based on its own internal order books instead of cross-venue reference prices.
That’s when Ethena’s USDe stablecoin flash-crashed to $0.65 on Binance while it stayed at $0.99 on Curve and Uniswap. The problem wasn’t Ethena’s design; on-chain redemptions and hedges were functioning, and more than $2 billion of USDe was redeemed within 24 hours. The problem was Binance’s local oracle, which read its own thin order book as the “market price.”
As bids disappeared, Binance’s system recalculated the value of USDe collateral lower, pushing thousands of cross-margin accounts below maintenance levels. That triggered a new wave of liquidations, which sold more assets into the already collapsing market.
Making matters worse, the exchange throttled APIs as traffic spiked, leaving some traders unable to cancel orders or adjust margin. In the aftermath, Binance admitted they had “technical glitches” and said it would compensate affected accounts, paying out $283 million to users whose USDe, BNSOL, or WBETH collateral was unfairly marked down during a 40-minute window (21:36–22:16 UTC).
The key takeaway: The problem wasn’t Ethena but Binance’s dependence on its own liquidity. A self-referential oracle turned a local liquidity gap into a platform-wide collateral crisis.
Lighter and other smaller perps venues went fully offline for minutes at a time. Meanwhile, Hyperliquid stayed online and profited. Its HLP vault, which automatically takes the other side of user trades and absorbs liquidations, reportedly earned over $40 million during the event.
The Ethena Stress Test
For Ethena, the crash became a major stress test — and it passed. USDe’s on-chain pools held steady around $1, and redemptions cleared as designed. The temporary Binance depeg was an off-chain pricing error, not a systemic failure. Ethena founder Guy Young said on X, “Ethena's mint and redeem function had zero downtime and was processing the largest number of withdrawals in its lifetime - more than $1b in a few hours and $2b in a 24hr period with zero issues.”
As the dust settles, it’s clear no single actor can be blamed.
Trump’s tariff threat, perpetuals traders chasing gains in an over-levered market, and Binance’s oracle failure turned a macro wobble into the largest single-day liquidation event in crypto history. And Ethena’s USDe happened to be in the eye of the storm.
The 10/10 crash showed that market plumbing can matter as much as macro news. When data feeds, liquidation systems, and collateral oracles all start chasing their own tails, even a tweet can bring down $19 billion in leverage.
With love,
Cami, founder of The Defiant
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🎬WATCH
What Crypto VCs Want Now | Aryan Sheikhalian
In this episode of The Defiant Podcast, we sit down with Aryan Sheikhalian, Research Lead at CMT Digital, to unpack the shift from “crypto as an asset” to crypto as infrastructure: 24/7 markets, instant clearing and settlement, and new structured products that couldn’t exist before.
We talk about tokenized equities, how identity layers and ZK proofs unlock mainstream distribution through banks and fintechs, and where regulation is pushing builders toward partnerships and licensed rails.
Top News in the Past 24 Hours
- MetaDAO Community Votes Against VC Discount in $6M OTC Deal MetaDAO’s community recently rejected a proposal to mint and sell $6 million worth of META tokens to two venture capital firms, DBA and Variant, at a roughly 30% discount. Why it matters: If passed, the deal would have minted over 1.47 million new META tokens, diluting existing holders by around 7-8%.
- UMBRA Trades 5X Above ICO Price After Oversubscribed Raise The native asset of a new Solana-based privacy protocol, Umbra, is trading almost five times higher than its initial coin offering price, after the 50x oversubscribed ICO concluded, and the token launched on Friday. Why it matters: The large show of investor interest is yet another signal that the privacy meta is in full swing. The sale was also incubated by MetaDAO.
- Russia’s Central Bank Considers Tokenizing Russian Stocks, But for Foreigners After the Moscow Exchange proposed listing tokenized versions of Russian stocks for sale to foreign investors, the country’s central bank said it would consider the move. Why it matters: If approved, this could open a new channel for capital inflows, without relying on sanctioned infrastructure.
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