The DeFi space experienced another tense moment as the Lista DAO loan vault managed by MEV Capital and Re7 Labs reached 99% utilization, triggering forced liquidations across major markets.
If you have parked your funds in DeFi lending protocols, now is the time to be cautious. Utilization across multiple platforms is now above 90%, indicating tight liquidity and increasing risk.
Red flags before liquidation
Lista DAO confirmed that it is closely monitoring both @MEVCapital USDT Vault and @Re7Labs USD1 Vault. There, collateral assets $sUSDX and $USDX faced unusually high borrowing rates and had no repayment activity for several days.
Lista Lending said that as an on-chain P2P lending protocol, it has been proactively engaging both teams to address the situation before it worsens. But with borrowing costs skyrocketing and repayments falling behind, the DAO had little choice but to take action.
Emergency vote triggers forced liquidation
Late Thursday, @lista_dao launched a one-hour emergency vote (LIP-022) to approve the forced liquidation of the USDX/USD1 market. The move followed a rapid rise in borrowing rates and a freeze in repayment flows for vaults operated by MEV Capital and Re7 Labs.
Within minutes, governance participants began voting. The response was decisive.
In an update on X, Lista DAO said, “Due to ongoing voting showing overwhelming agreement in favor of LIP-022, we have moved forward with the liquidation process to minimize uncertainty and protect the protocol.”
The DAO called on both MEV Capital and Re7 Labs to act swiftly and cooperatively to stabilize the ecosystem and protect user assets.
We are aware of this issue and have been monitoring it closely. @MEVCapital USDT Vault and @Re7Labs USD1 Vault, collateral assets ($sUSDX and $USDX) continues to face unusually high borrowing rates with no repayment activity taking place.
As an on-chain P2P lending protocol, Lista Lending…
— Lista DAO (@lista_dao) November 6, 2025
Collaborative efforts with Re7 Labs
Lista DAO recognized Re7 Labs for taking proactive steps in the best interest of users and maintaining transparency throughout the liquidation.
“We continue to work together towards a smooth and transparent resolution. Their professionalism and openness are key to our community,” the DAO said.
It added that clearing is actively progressing and is nearly complete, with final settlement data still being verified.
Inside the liquidation: what happened
The liquidation process involves several coordinated steps to mitigate risk and recover funds.
1. Liquidation process, almost all debts have been processed. A small portion is still being tested.
2. A portion of the penalty and liquidation penalty will be automatically collected in your Lista DAO account. These funds will be used to buy back the collateral after the calculation is complete.
3. Public Liquidation Pool, remaining unliquidated positions will be transferred to the public liquidation pool and the process will be open to community participation.
4. Interest rate adjustment. The USDX/USD1 market interest rate has been adjusted to 3% as there is no reason to continue accruing interest while liquidation is in progress.
Re7 Vault (USDX Market), its numbers
According to official Lista DAO data released on November 6, 2025, 20:57 UTC+8, clearing activity in Re7 Vault (USDX market) showed significant movement.
Flash loan liquidation:
Cleared: 3,526,011 USDX
Amount recovered: 2,927,163 USD1
Penalty:
- Oracle’s price adjustments widened the price differential and increased penalties.
- A total penalty of USD 474,798.48 will be collected and used to repurchase the collateral as part of the recovery process.
Remaining debts in the vault:
- Approximately 2,090,459.901 USD1 has been moved to the public clearing zone and is now open for anyone to participate.
Re7 Vault (USDX Market) Liquidation Overview
Statistics until 2025/11/06 20:57 UTC+8:
1️⃣ Flash loan liquidation
– Cleared: 3,526,011 USDX
– Amount recovered: 2,927,163 USD12️⃣ Penalty fee
– Oracle adjustments widened price differentials and increased liquidation penalties.
– a… pic.twitter.com/xBnJBkBLQf— Lista DAO (@lista_dao) November 6, 2025
Fallout market: USDX Depeg to $0.38
The forced liquidation caused immediate market turmoil. According to on-chain data, the stablecoin USDX associated with the affected vaults was unpinned at $0.3887.
The decline caught the attention of traders, and one whale in particular was moving quickly.
brave whale play
Wallet 0xe454 is frequently tracked by on-chain analysts and spent 800,000 USDT to buy 933,241 USDX at an average price of $0.8572 shortly after Depeg came to our attention.
He already has 1.4 million USDX, which he bought a week ago and submitted the entire batch for redemption.
A successful redemption would net him about $135,000, but it’s a bold move in volatile conditions.
However, three hours later, there is still no confirmation that the redemption was successful, raising questions about processing delays and liquidity constraints.
Lista DAO gives users peace of mind
In its latest update, Lista DAO reassured users that the recovery of funds and collateral remains its top priority. The DAO emphasized that liquidation penalties and recovered assets will be strategically repurposed for collateral repurchase and stabilization of market activity.
While Re7 Labs continues to provide technical support, community members are encouraged to participate in the public liquidation pool to eliminate remaining positions.
“This is a collective effort to restore stability. The process is transparent and ongoing,” the DAO added.
Broad warning against DeFi
While the Lista DAO situation is being addressed, the incident highlights major concerns across decentralized finance: liquidity crunch and over-leveraged vaults.
Many DeFi platforms now have utilization rates above 90%, and similar risks may arise elsewhere. Analysts have warned that the liquidity crunch could amplify the Depeg phenomenon, forcing liquidations and testing the resilience of lending protocols.
The message is clear. Carefully monitor usage levels, monitor vault activity, and ensure collateral positions remain within safe thresholds.
As the liquidation completes, all eyes will be on USDX’s redemption process and whether Re7 Labs and MEV Capital will be able to fully restore the peg’s stability.
So far, Lista DAO’s quick response and transparent communication have helped to limit panic and maintain trust, but it’s a stark reminder of how quickly things can change in DeFi.
Disclosure: This is not trading or investment advice. Always do your research before purchasing any cryptocurrency or investing in any service.
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