Lista DAO Faces Vault Liquidation as Utilization Hits 99%

**Lista DAO’s Lending Vaults Hit 99% Utilization, Triggering Forced Liquidation Across Key Markets**

The DeFi space just witnessed another tense moment as Lista DAO’s lending vaults, managed by MEV Capital and Re7 Labs, reached 99% utilization. This critical threshold triggered a forced liquidation across key markets, raising alarms throughout the decentralized finance ecosystem.

If you have funds deposited across DeFi lending protocols, this is a moment to stay alert. Utilization rates across multiple platforms are now above 90%, signaling tightening liquidity and rising risks.

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### The Warning Signs Before the Liquidation

Lista DAO confirmed that it had been closely monitoring both the @MEVCapital USDT Vault and @Re7Labs USD1 Vault. Collateral assets USDX and SDX were experiencing abnormally high borrowing rates coupled with no repayment activity for several days.

As an on-chain peer-to-peer (P2P) lending protocol, Lista Lending actively engaged both teams to address the worsening situation. However, with borrowing costs spiraling and repayment volumes stalled, the DAO had little choice but to take decisive action.

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### Emergency Vote Triggers Forced Liquidation

Late on Thursday, @lista_dao initiated an emergency one-hour vote (LIP-022) to authorize a forced liquidation of the USDX/USD1 market. This move came in response to the rapidly rising borrowing rates and frozen repayment flows within the vaults operated by MEV Capital and Re7 Labs.

Governance participants quickly cast their votes, with an overwhelming consensus in favor of liquidation.

> “With the ongoing vote showing an overwhelming consensus for YES on LIP-022, we have proceeded with the liquidation process to minimize uncertainty and safeguard the protocol,” Lista DAO shared in an update on X.

The DAO urged both MEV Capital and Re7 Labs to act swiftly and cooperatively to stabilize the ecosystem and protect user assets.

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### Coordinated Effort with Re7 Labs

Lista DAO credited Re7 Labs for their proactive steps in acting in users’ best interests and their transparency throughout the liquidation process.

> “We’ll continue working together toward a smooth and transparent resolution. Their professionalism and openness have been key for the community,” the DAO stated.

The liquidation was actively underway and nearly complete at the time of reporting, with final settlement data still under verification.

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### Inside the Liquidation: What Happened

The liquidation process involved several coordinated steps aimed at unwinding risk and recovering funds:

1. **Liquidation Process:** Nearly all debt positions have been processed, with only a small portion pending verification.

2. **Penalty Fees:** A share of liquidation penalty fees has been automatically collected under Lista DAO’s account. These funds will later be used to repurchase collateral once calculations are finalized.

3. **Public Liquidation Pool:** Remaining unliquidated positions have been moved to a public liquidation pool, opening participation to the broader community.

4. **Rate Adjustment:** The USDX/USD1 market interest rate was adjusted to 3% to prevent accrual of unnecessary interest while the liquidation is ongoing.

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### Re7 Vault (USDX Market) — The Numbers

According to official data released by Lista DAO at 20:57 UTC+8 on November 6, 2025, the liquidation activity in the Re7 Vault (USDX Market) showed significant movement:

– **Flash Loan Liquidation:** 3,526,011 USDX liquidated
– **Recovered Funds:** 2,927,163 USD1 recovered
– **Penalty Fees:** Due to oracle price adjustments, a wider price gap led to higher penalty fees. A total of 474,798.48 USD1 was collected as penalties, which will be used to repurchase collateral as part of the recovery process.
– **Remaining Vault Debt:** Approximately 2,090,459.901 USD1 has been moved to the public liquidation zone, now open for anyone to participate.

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### Market Fallout: USDX Depegs to $0.3887

The forced liquidation triggered immediate market turbulence. USDX, the stablecoin tied to the affected vault, depegged to $0.3887 according to on-chain data.

This sharp drop caught the attention of traders and notably one whale. Wallet address 0xe454, frequently tracked by on-chain analysts, spent 800,000 USDT to purchase 933,241 USDX at an average price of $0.8572 shortly after the depeg was noticed.

The whale had already acquired 1.4 million USDX a week earlier and submitted the entire batch for redemption. If the redemption is successful, this trader stands to make approximately $135,000 in profit— a bold play amid highly volatile conditions.

However, three hours later, no confirmation of a successful redemption had been received, raising questions about possible processing delays or liquidity constraints.

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### Lista DAO Reassures Users

In its latest updates, Lista DAO reassured users that fund and collateral recovery remain top priorities. The DAO emphasized that liquidation penalty fees and recovered assets would be strategically redeployed to buy back collateral and stabilize market activity.

Re7 Labs has continued to provide technical support, while community members are encouraged to participate in the public liquidation pool to help clear remaining positions.

> “This is a collective effort to restore stability. The process is transparent and ongoing,” the DAO added.

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### A Broader Warning for DeFi

While Lista DAO’s situation is currently being managed, the event highlights a larger concern within decentralized finance: liquidity strain and over-leveraged vaults.

With utilization rates on many DeFi platforms exceeding 90%, similar risks may arise elsewhere. Analysts warn that tight liquidity can amplify depeg events, trigger forced liquidations, and severely test the resilience of lending protocols.

The message is clear: monitor utilization levels closely, follow vault activity, and ensure collateral positions remain within safe thresholds.

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### What’s Next?

As the liquidation wraps up, all eyes remain on the USDX redemption process and whether Re7 Labs and MEV Capital can fully restore peg stability.

For now, Lista DAO’s swift response and transparent communication have helped contain panic and maintain community trust. Nonetheless, this incident serves as a stark reminder of how quickly conditions can deteriorate within DeFi markets.

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**Disclaimer:** This article is for informational purposes only and does not constitute trading or investment advice. Always conduct your own research before buying any cryptocurrency or investing in any financial services.
https://themerkle.com/lista-dao-faces-vault-liquidation-as-utilization-hits-99/