Emergency Liquidation Vote Underway as USDX Vaults Face 800% Borrowing Rates

Key Notes

• The vote has 18 participants so far, all voting yes to enable forced liquidation of the USDX market.
• MEV Capital set its allocation cap to zero and updated the Interest Rate Model for the USDT/sUSDX market in response.
• Borrowing rates in the affected vaults reached 800% with zero repayments from major borrowers linked to Stables Labs.

Lista DAO launched an emergency governance vote on Nov. 6, 2025, to enable forced liquidation of the USDX market involving vaults managed by MEV Capital and Re7 Labs. The vote, designated as LIP 022, will run until Nov. 9 at 12:12 PM through the Snapshot platform.

At the time of writing, only 18 veLISTA token holders have voted, all in favor of the liquidation measure. The proposal targets abnormally high borrowing rates in vaults where collateral assets $sUSDX and $USDX have shown no repayment activity.

Lista DAO stated that the forced liquidation aims to minimize potential losses and maintain healthy market conditions across the on-chain peer-to-peer lending ecosystem.

📢 LIP 022 – Emergency Vote: Enabling Forced Liquidation for USDX Market (re7 vault)

This proposal is being put forward as an emergency one-hour vote, following a request from the vault curator, to enable forced liquidation mechanisms for the USDX/USD1 market.
🔹The @Re7Labs … pic.twitter.com/cs9ynd3XOH

— Lista DAO (@lista_dao) November 6, 2025

Timeline of Events

9:23 AM UTC: Lista DAO publicly announced it was monitoring borrowing rates reaching 800% in the MEV Capital USDT Vault and Re7 Labs USD1 Vault. The protocol identified zero repayments from major borrowers linked to Stables Labs using collateral assets $sUSDX and $USDX, according to the DAO. Lista called on both institutional vault managers to take immediate responsibility and transparency to protect users.

We are aware and has been closely monitoring the @MEVCapital USDT Vault and @Re7Labs USD1 Vault, where collateral assets ($sUSDX and $USDX ) continue facing abnormally high borrowing rates without repayment activity.

As an on-chain P2P lending protocol, Lista Lending has been…

— Lista DAO (@lista_dao) November 6, 2025

10:55 AM UTC: Re7 Labs provided a proposed plan through the Lista DAO Discord channel to address the vault issues, proposing forced liquidations. Lista DAO acknowledged the statement and announced an imminent governance vote to enable the liquidation process.

Update:

We’ve received a public statement from @Re7Labs in our Discord regarding their proposed plan for asset handling the USDX market.
Link: https://t.co/2FBwiU6nSo

In light of this update, Lista DAO will soon initiate a governance vote to proceed with the market liquidation… https://t.co/yNlQzTbV5A pic.twitter.com/IX0ZFgXfJw

— Lista DAO (@lista_dao) November 6, 2025

11:08 AM UTC: PancakeSwap said it was monitoring the situation and advised users to review their positions in affected liquidity pools.

Our team is also aware of the situation involving the affected vaults and are monitoring it closely. Please review and monitor your positions involving these vaults on PancakeSwap. We’ll continue to stay updated and share information as needed.

Stay SAFU. https://t.co/tHpY2Z0L5J

— PancakeSwap (@PancakeSwap) November 6, 2025

11:15 AM UTC: Lista DAO launched the emergency governance vote (LIP-022) at the request of the Re7 Labs vault curator. The proposal calls for adjusting the oracle prices of USDX in proportion to outstanding loan amounts to trigger public liquidation of affected positions.

11:50 AM UTC: MEV Capital acknowledged elevated borrow rates in its USDT/sUSDX markets and implemented mitigation measures, including setting the allocation cap to zero and updating the Interest Rate Model. The collateral assets are similar to those implicated in the $93M Stream Finance loss , where xUSD collateral contributed to protocol failures.

USDT/sUSDX markets have experienced elevated borrow rates with limited repayment activity.

Recent MEV Capital actions:
– Set allocation cap to 0 for this market
– Updated the Interest Rate Model (IRM) to adjust borrowing incentives

ListaDAO's community is voting to update the… https://t.co/fnNZ3GfgNK

— MEV Capital (@MEVCapital) November 6, 2025

The vote will determine whether Lista DAO proceeds with the oracle override and forced liquidation process. The proposal notes that immediate action may be taken if abnormal liquidity conditions are detected in the USDX market, even before the voting period concludes.

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