USDe Not a Stablecoin, Says OKX CEO Star Xu

• OKX CEO Star Xu clarified that USDe is not a stablecoin but a tokenized hedge fund.
• Xu praised Ethena Labs for its risk management and transparency. 
• He urged exchanges to apply robust risk controls before treating USDe as collateral.

OKX CEO Star Xu clarified that the sharp USDe price drop should not be seen as a stablecoin de-peg but as market stress on a synthetic-dollar instrument.

Xu called USDe a “tokenized hedge fund”, built by Ethena Labs, and said traders misread its structure as a risk-free yield-bearing stablecoin.

His response followed a detailed analysis from AltLayer founder YQ Jia, who suggested that the October 10–11 market crash might have been a coordinated attack on Binance and USDe holders.

While acknowledging the validity of Jia’s analysis, he emphasized that the narrative around “USDe’s depeg” is fundamentally flawed.

USDe Works Like a Structured Fund, Not a Dollar Peg

Xu explained that USDe’s delta-neutral strategy combines crypto collateral and short futures to balance exposure. Such a setup aims for low volatility but still carries funding-rate and liquidation risk during extreme conditions.

“Calling USDe a stablecoin misleads traders,” Xu said. “It behaves more like a structured investment vehicle than a pegged asset.”

The model, he added, reflects the next phase of on-chain money-market engineering rather than a simple stablecoin experiment.

Ethena’s Transparency Praised Despite Market Shock

Despite the sell-off, Xu credited Ethena Labs for maintaining transparency about its collateral and risk metrics.

He said Ethena’s public dashboard and proof-of-reserves disclosures set a new benchmark for on-chain risk-management transparency.

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OKX, an early angel investor in Ethena’s ENA token, may expand support for USDe once volatility stabilizes.

Xu said exchanges must apply dynamic risk controls before accepting synthetic assets like USDe as collateral, to avoid exchange-collateral risk during liquidity crunches.

Focus Shifts to Regulation and Risk Classification

USDe’s plunge to $0.6567 revived memories of the LUNC and UST collapses, but Xu argued that comparing it to those algorithmic stablecoins misses the nuance. 

Because USDe distributes yield through derivatives exposure, regulators may view it as a security-like product rather than a payment stablecoin.

Analysts expect the SEC and Asian regulators to assess whether such synthetic-asset models fit existing frameworks for tokenized funds. Xu’s broader message then is to understand the product before labeling it, and build rules that match its real risk profile, not its marketing tagline.

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