Lead · Mechanism Analysis
ETH dropped over 77% in 2022, but USDS didn't collapse — because overcollateralized systems have three defense lines: 150% buffer, automated liquidation bots, and PSM's instant fiat peg channel. Algorithmic types have none of these.
Derek Tan
·
July 03, 2026
In May 2022, UST collapsed and $40 billion evaporated. Simultaneously, ETH's price fell from $3,000 to $1,700 in the same month — a drop exceeding 43%. During this period, Aave and Sky's (formerly MakerDAO) crypto-backed Stablecoin USDS (then called DAI) also faced massive Liquidation pressure on ETH collateral. But USDS didn't collapse in the 2022 bear market, while UST did. The most...