BlockBeats news, December 26, Solv Protocol’s business development lead Catherine stated, “Binance and USD1 launched a 20% fixed annual deposit promotion, leading many users to exchange USDT for USD1, driving USD1 to a premium of approximately 0.39% at one point. Some funds subsequently entered the Lista DAO lending market, borrowing USD1 using SolvBTC or SolvBTC-BTCB as collateral, and gradually selling in the spot market to meet demand.
During this process, some traders directly sold BTC via the BTC/USD1 trading pair using market orders. However, due to the extremely thin liquidity of this pair, a single market order quickly exhausted the buy-side depth, briefly pushing down the BTC quote, before being rapidly bought back by arbitrage bots to restore the price.”
CZ clarified regarding this incident, stating, “This actually shows that the trading platform was not involved in the related trades. Due to the low liquidity of newly listed trading pairs, a relatively large market order can cause a momentary price spike, but arbitrageurs quickly correct the price back to normal levels. Meanwhile, since this trading pair is not included in any index, it did not trigger any liquidations.”
