CZ clarifies: The BTC/USD1 trading pair "flash crash" was caused by a momentary price fluctuation due to low liquidity, with no liquidation involved.

On December 26, Solv Protocol Business Development Lead Catherine posted that “CEX and USD1 launched a 20% fixed annualized deposit promotion. A large number of users exchanged USDT for USD1, which caused USD1 to temporarily experience about a 0.39% premium. Some funds were subsequently borrowed through the Lista DAO lending market, using SolvBTC or SolvBTC-BTCB as collateral to borrow USD1, and gradually sold on the spot market to meet demand. During this process, some traders directly sold BTC using market orders on the BTC/USD1 trading pair. However, due to the extremely thin liquidity of this trading pair, a single market order quickly swept away the buy orders, briefly lowering the BTC price, which was then rapidly bought back and corrected by arbitrage bots.” CZ clarified regarding this incident, stating, “This actually indicates that the trading platform was not involved in the related transactions. Due to the low liquidity of the newly listed trading pair, a large market order can cause a sudden price spike, but arbitrageurs quickly correct the price back to normal levels. At the same time, since this trading pair is not included in any index, it did not trigger liquidation.”