The most important microstructure fact from the October 10th crypto massacre isn’t just “volatility was high and we had chain congestion,” it’s that the reference/pricing/quotes many desks and DEXs lean on became unreliable, exactly when everyone needed it most. As it stands today, I am cautious to make acquisitions on what the root cause was. It is easy to point fingers at Binance right now but I don’t think that is justifiable, yet. The timing of depegs and initial cascade is still being looked into.

This is subject to change with more info.

However, for us onchain users, the main issue was that Binance prices their wrapped assets at spot market price and not underlying value price. This is a known flaw that many borrow/lend protocols have identified, such as Solend and Aave, and is the reason many loopers were largely okay.

Using secondary market pricing as an oracle for a token backed by real dollars (or SOL with an LST) makes no sense -> given the market price