EDIT 2025-10-15 a long footnote 5 on subsequent Backpack developments

On Friday, 10 October 2025, crypto markets saw $19+ billion[^1] in liquidations, the largest day ever. See also, global markets plummeted.

preliminary statement

Mass vigilance is good! People should be able to shout "fkery" at will, and to snipe at market leaders ("punching up"). The cost of this is a lot of noise[^2] tho.

Now, to cut through the noise...

wut happened

• binance internal policies + market structure (i.e., permissionless leverage from 100k+ global degens due to an ecosystem of farming incentives) produced a weakness[^3]
• weak points got attacked for ~$200m profit
• billions of liquidations -> collateral damage[^4] (sorry)
• lower leverage overall -> is healing
• tide going out shows who was swimming naked, and/or previously unseen weak points in various systems (notably Backpack, Binance, Rabby, DeBank + other DeFi pillars)
• MM liquidity pullback was side effect of ADL consequences (internal system shows a posi...