Solana-based stablecoin USX dropped to $0.80 on December 26 after liquidity dried up on decentralized exchanges.
The depeg lasted approximately one hour before Solstice Finance injected emergency liquidity to restore the peg.
The Solana-native synthetic stablecoin recovered to around $0.99 following the intervention.
Solstice maintained that underlying collateral remained intact and redemptions continued functioning throughout the incident.
What Happened
USX began losing its dollar peg around 1:45 a.m. UTC on Thursday as sell pressure overwhelmed available liquidity on Orca and Raydium.
Blockchain security firm PeckShield flagged the depeg shortly after it began.
Solstice Finance responded at approximately 4:30 a.m. UTC by adding liquidity to affected trading pools.
The protocol confirmed that its net asset value remained unaffected and collateralization exceeded 100% throughout the event.
The company stated that 1-to-1 redemptions through the primary market remained fully operational.
Primary market participants can mint and redeem USX directly with the issuer at face value, while secondary markets involve trading on exchanges where prices fluctuate based on supply and demand.
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Why It Matters
The incident exposed vulnerabilities in how newer stablecoins maintain stability during periods of thin liquidity.
Holiday trading conditions amplified the impact as fewer market makers and liquidity providers remained active.
USX launched in September 2025 with backing from Deus X Capital, Galaxy Digital, and Bitcoin Suisse.
The protocol secured $160 million in total value locked at launch and now maintains approximately $310 million in market capitalization.
Solstice promised to publish an additional third-party attestation report but did not specify a timeline.
The protocol stated it is working to deepen secondary market liquidity to prevent similar incidents during large withdrawals.
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