Binance has voluntarily announced compensation for users who have been loss due to the platform’s disruptions late Friday, triggering a significant pricing accident in wrapped Fyrther (Wbeth), Binance Staked Sol (BNSOL) and Ethereum’s synthetic dollar usde.
“Due to significant market fluctuations over the past 16 hours and a significant influx of users, some users have encountered problems with their transactions. I apologize deeply for this. If you have incurred losses that can be attributed to Binance, contact our customer service to register your case,” said Yi He, co -founder and head of customer manager at X.
He added that the stock exchange will review account activity on a case -by -case basis to determine compensation, emphasizing that losses due to market fluctuations and unrealized profits are not entitled to compensation.
Binance’s wrapped Beacon Ether (Wbeth) Price threw himself to as low as $ 430 around 21:40 UTC on Friday, representing a staggering 88% discount compared to ether-tether (ETH/USDT) spot price that traded over $ 3,800 at the same time.
Binance Staked Sol (BNBSOL) also taned $ 34.90 and traded with a massive discount at the spot price at Solana. Meanwhile, Ethena’s synthetic dollar slipped usde, using Delta Neutral Cash-and-Carry, quickly to 65 cents around the same time as Wbeth and BNBSOL crashed.
Explaining the crash
Tokens like Wbeth and BNBSOL are designed to track the spot price for their underlying assets closely.
Binance valued these wrapped assets based on their spot market prices, as noted by ALTLayer -founder YQ JIA on X. Under normal conditions, arbitrageurs help maintain these prices close to their basic values by simultaneously buying the cheaper asset and selling it more expensive.
However, as Binance’s infrastructure became stress due to increased market volatility and massive liquidation, market producers and arbitrageurs could not access the primary markets and perform trades effectively, which resulted in a collapse of price adjustment. It led to a crash in wrapped tokens.
“Binance represents maybe 50% of the global spot volume. When they [market makers] Unable to access Binance – either to uncover positions or even see prices – they fly blind. Would you bid on Wbeth to $ 2,000 when you can’t see what’s happening in the largest market? Of course not, “Jia noted.
Jia added that market producers’ inability to participate created a liquidity vacuum reminiscent of portfolio insurance in 1987 – “Mechanisms designed for normal markets that become Procyclic accelerants during crashes.”
Corrective measures
Within 24 hours after the crash, Binance announced a shift to the use of pricing of conversion conditions to wrapped assets.
Instead of appreciating Wbeth based on unstable and distressed spot market actions, the exchange would now praise it according to the underlying stacking relationship representing the actual amount of ETH that each wrapped token represents.
The change means a more stable and accurate valuation in times of Market Stress by interrupting wrapped token prices from short -term spot market fluctuations.
