Ethena's synthetic stablecoin, USDe, has experienced a dramatic decline, losing $8.3 billion in value since October 10. The stablecoin's market capitalization fell from $14.7 billion to $6.4 billion, as traders shifted towards traditional stablecoins during a massive liquidation event. This sell-off, the largest in crypto history, erased $1.3 trillion from the market and liquidated over $19 billion in positions. USDe, which maintains its $1 peg through exchange-based delta-hedging rather than fiat backing, saw its value drop to $0.65 on a major platform. This highlights the inherent risks associated with high-yield assets that offer a poor risk-to-reward ratio. Analysts warn that such instruments should not be considered safe havens in volatile markets.