Original - Odaily

Author - Nan Zhi

December 4,Binance announces the launch of Euro stablecoin Anchored Coins EUR (AEUR), and open spot trading pairs. In addition, Binance also launched AEUR/USDT, BTC/AEUR, ETH/AEUR, and EUR/AEUR trading pairs, and launched a zero-fee activity.

Since being listed on Binance, AEUR has been stable around 1.08 USDT (as of 11:00 on December 6, the EUR/USD exchange rate was 1.0791). But around 1:45 this morning, AEUR began to rise unilaterally, with the highest rise in the first round reaching 3.156 USDT (equivalent to 2.9 euros).An increase of nearly 200%。

K-line disco

After the first wave of upward trend ended at 2:02, AEUR started the bounce mode again, oscillating back and forth between about 1.9 USDT and 1.07 USDT, which can go up and down more than ten times a second. Its second-level trend chart is as follows As shown (the data at this time is also inconsistent with the real-time conditions last night).

God-given arbitrage opportunity?

Since Binance has listed multiple trading pairs for AEUR, there is potential for arbitrage in the event of severe price fluctuations. The picture below shows the relevant trading pair prices around 2 oclock. Taking 1 BTC worth 44,000 USDT as an example, it can be exchanged for 26,000 AEUR, and 26,000 AEUR can be exchanged for 51,000 USDT, with a significant price difference.

Last night, the trading volume of the BTC/AEUR trading pair reached 28 BTC in 1 hour.reallyThere is some room for arbitrage。

Why did AEUR break down?

As of now, Binance officials have not disclosed the reasons for the abnormal situation of AEUR, and the relevant handling measures are due toThe price of AEUR fluctuates greatly. The trading business of AEUR trading pairs is suspended, which does not affect the deposit and withdrawal business.”, according to last night’s situation, OdailySpeculateas follows:

As mentioned earlier, the standard price of AEUR should be around 1.08 USDT (EUR/USD exchange rate is 1.0791), and after the first wave of rising collapse, the lower limit of the upper and lower fluctuation range of the K line is also below 1.08 USDT, while the upper limit is at 1.9 USDT,There is a possibility that the market maker program inputs one less 0 and changes from 1.09 USDT to 1.9 USDT, ultimately leading to dozens of transactions per second between the two price points.

During the period from the de-anchoring to the suspension of trading, the AEUR/USDT trading pair traded a total of 11 million US dollars. Based on the fact that 50% of the trading volume was completed by market makers, the loss per order was 0.82 USDT.The market maker may have lost $3 million。

Of course, the truth remains to be further investigated and disclosed by all parties. However, such unstable performance of new stablecoins will also occur in major exchanges. Whether it is manual operation errors by market makers or insufficient depth of currency pairs, such incidents are indeed rare in traditional financial markets with complete infrastructure.

Update on the progress of the situation

After 16:00 on December 6, Beijing time, Binance released a follow-up plan for this matter.announcement,sayWill assist the AEUR project team to provide reasonable compensation to affected users in accordance with relevant plans. The compensation plan is as follows:

Compensation user range:

During the period from 01:41:16 on December 6, 2023 (East Eighth District time) to 02:31:59 on December 6, 2023 (Eastern Eighth District time) (hereinafter referred to as the compensation period), through AEUR/USDT, Users who bought AEUR for the BTC/AEUR, ETH/AEUR and EUR/AEUR spot trading pairs and did not successfully sell AEUR on the Binance spot platform before 02:31:59 on December 06, 2023 (Eastern Eighth District time) ;

Compensation will be made for the AEUR positions net purchased by the relevant users during the compensation period at the AEUR price of the Binance spot platform at 01:41 on December 06, 2023 (Eastern Eighth District time) (i.e.: 1 AEUR is 1.07999 USDT).

Compensation calculation method:

Reimbursement for a single eligible user = (User’s AEUR net purchase volume * User’s AEUR average purchase price) – (User’s AEUR net purchase volume * 1.07999 USDT)

User’s net buying amount of AEUR = Total amount of AEUR bought on Binance Spot platform during the compensation period - Total amount of AEUR sold on Binance Spot platform during the compensation period

Average AEUR buying price = total USDT equivalent of AEUR purchased on the Binance Spot platform during the compensation period / total amount of AEUR purchased on the Binance Spot platform during the compensation period

Example:

User A AEUR net buying amount = (100 - 10) AEUR = 90 AEUR

User A AEUR average buying price = (100 AEUR / 26, 000 AEUR) * 43, 600 USDT / 100 AEUR = 1.6769 USDT

During the compensation period, User A bought 100 AEUR through the BTC/AEUR spot trading pair when the price reached 26,000 AEUR, and then sold 10 AEUR through the BTC/AEUR spot trading pair when the BTC price reached 30,000 AEUR. Moreover, when user A bought AEUR, the price of BTC was 43, 600 USDT.

Therefore, the total compensation amount that User A will receive = (90 * 1.6769 USDT) - (90 * 1.07999 USDT) = 53.7219 USDT

Compensation issuance:

Eligible users will receive USDT token compensation before December 09, 2023. Users can go to Account >Rewards CenterView and redeem;

All tokens are valid for 30 days from the date of issuance. Eligible users need to claim the tokens before the expiration date.