LIVE | Market Crash: What Happened and What’s Next
Episode publishedPodcast: EmpireEmpire
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Shall we, Doug?
Let's let's do it.
Alright. Let's do it. Sweet, everyone. Alright. So I wanted to jump on with Doug because, yeah, Friday was the biggest liquidation in crypto history, and I think Doug probably had the best recap of what happened, specifically focused on on the the ADL system. But there's a there's a lot that happened here. I think, Doug, maybe the best place to start would be I wanna cover everything. Like, did Binance do something wrong? Like, should we have fixed price oracles? What are what is the ADL system? What happened with Athena? I I wanna cover everything, but maybe I would just love to start with yo
Everything. Yeah. Yeah. So I don't know. I I think people are still kinda of piecing together what happened. It's like we're kind of in an interesting moment in the market now because you have, right, you have the traditional centralized exchanges, you have all of these PerpDex's out there. People are all kind of doing like new behavior especially like around farming and stuff, farming the perp dexus. I think it's like kind of been somewhat of a new like market structure lately and maybe this is the first time it's like really been tested. But you know obviously it started like Trump tweeted,
for sure. So what was the you know, everyone always wants a clear headline. Right? Like, FTX, Luna, Celsius, like, the smoking gun. Right? I saw a tweet about, you know, how there's, you know, $60,000,000 of USDE being sold on Binance triggered the entire liquidation, which I I I think is incorrect, by the way, after looking into the timing of when that happened. But what is there is there a smoke is there, like, this is the reason for this massive liquidation in your mind? Is it, like, you know, it was all an Oracle problem or it was all, you know, Trump's tweet triggered this or, you know, H
I I mean, like, with I I guess it's hard to know, but I I don't I don't see anything that's, like, clearly and like you said, like, Athena DPEG, some people were saying that, I think, like, CL, like, posted where he's like, okay. Like, the timing just doesn't line up. I think it's, like, just right. Like, there's a lot of leverage in the system. Like, this happens to crypto periodically. You get a lot of leverage build up, and you get flushed. So so it almost feels like like May 2021 Mhmm. To me where it's like nothing, like, obvious happened besides just a lot of people have been levering up
Yeah. Yeah. It's interesting. It it does feel kinda more like this, like, liquidation cascade. Right? The last cycle, I think everyone it was it's it's interesting. We've talked about this a lot on empire. So, like, usual empire listeners will know this. But, know, you last cycle was such a leverage driven cycle, but it was it was leverage not in the traditional trading sense, I feel like, in the or in today's trading, like, perp sense. It was leveraged oftentimes given out by the centralized lending desks. Right? Genesys, BlockFi, Celsius, Nexo, people like that. And so it's but it's still a
Yeah. I think I think, right, like, a lot of a lot of leverage has built up in in perps, I think especially in in alts. Well, I mean, across everything. Like, obviously, BTC has, a ton of OI, but, like, you have I think people got pretty comfortable going from, holding, like, Fartcoin spot to, like, Fartcoin 2x, and that doesn't feel like that risky of a position. It's like this 2x. It's like Fartcoin's a big big you know, it's a big token. Right? Like, 2x shouldn't be super and and I think, like, a lot of people are kinda shocked thinking they weren't really a
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