Fluid DEX Rebalancing Mechanism Sparks $19 Million in Losses

By: bitcoin ethereum news|2025/05/16 01:15:05
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In the decentralized finance (DeFi) world, Fluid DEX — an emerging decentralized exchange — has drawn major attention. Liquidity providers (LPs) in its USDC-ETH pool have reported losses of up to $19 million caused by the platform’s rebalancing mechanism. This incident has sparked debate across the DeFi community and raised serious questions about transparency and accountability in protecting users. Ethereum Volatility Triggers Losses for Fluid DEX Fluid DEX launched in October 2024, when ETH traded around $4,400. The platform promised to generate liquidity of up to $39 for every $1 total value locked (TVL), attracting many LPs to provide liquidity to pools like USDC-ETH. However, since early 2025, ETH’s price dropped below $1,400 at one point and now hovers around $2,550. This sharp decline caused severe impermanent losses. According to Fluid’s report, the pool’s automated rebalancing mechanism — designed to optimize profits — became the primary source of these losses. “While the pool performs exceptionally well when prices stay within range (accruing strong fees for LPs), high volatility triggers rebalancing. This happens gradually through trades routed via the pool — from ~$3,800 to ~$1,560, and now ~$2,340. The rebalancing mechanism incurs realized losses for LPs that outweighed fee income,” Samyak Jain, co-founder of Fluid, said. Rebalancing mechanisms in AMMs like Fluid automatically adjust the pool’s asset ratio to maintain a balanced value based on mathematical formulas. This approach ensures stable liquidity and optimizes trading fee income, especially in high-volume pools. However, the risks are significant, particularly in volatile pools like USDC-ETH. When asset prices fluctuate heavily, they trigger impermanent loss. This means LPs may suffer losses compared to simply holding the assets outside the pool. Data from Dune Analytics shows a sharp drop in Fluid Vault’s TVL. As of mid-May 2025, cumulative losses for LPs reached $19 million. Tensions escalated when DeFi news provider DefiMoon publicly criticized Fluid and paid Key Opinion Leaders (KOLs) for failing to warn users about the rebalancing risks. DefiMoon claimed that Fluid heavily promoted the pool, promising high yields and even suggesting it could surpass Uniswap, one of the top DEXs. However, they said the platform barely mentioned the rebalancing risks, leaving many inexperienced LPs with heavy losses. “None of them ever mentioned rebalancing as a potential issue and I’m pretty sure neither of them put a single dollar of capital into this pool!” DefiMoon stated. Still, Samyak Jain defended the platform. He emphasized that Fluid’s stablecoin pools are still performing well and continue to generate strong returns for LPs. He also denied the $19 million figure, claiming the ETH-USDC pool only suffered “partial loss” due to general market volatility, not due to any flaw in Fluid itself. Fluid proposed a compensation plan to support affected LPs. It offered 500,000 FLUID tokens, worth $2.6 million, with a one-year vesting schedule. The Fluid DEX case serves as a warning to the DeFi community. Understanding risks is crucial before providing liquidity to any pool. Disclaimer In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated. Source: https://beincrypto.com/fluid-dex-reportedly-19-million-loss/

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On March 4, 2026, DDC Enterprise Limited (NYSE American: DDC) today announced preliminary, unaudited full-year financial performance for the year ended December 31, 2025. The company expects to achieve record revenue and record positive adjusted EBITDA, primarily driven by continued growth in its core consumer food business and overall margin improvement. The final audited financial report is expected to be released in mid-April 2026.


2025 Full-Year Financial Highlights


Revenue: Expected to be between $39 million and $41 million, reaching a new company high.


Organic Growth: Excluding the impact of the company's strategic contraction of its U.S. operations, core revenue is expected to grow 11% to 17% year over year.


Gross Profit Margin: Expected to be between 28% and 30%, reflecting continued operational efficiency improvements.


Adjusted EBITDA: The company expects to achieve a positive full-year result in 2025, a significant improvement from a $3.5 million loss in 2024, mainly due to rigorous cost controls and a higher-margin sales mix.


Core Consumer Food Business Performance


In 2025, DDC's core consumer food business maintained strong operational performance.


The company also disclosed Core Consumer Food Business Adjusted EBITDA, a metric that further excludes costs related to its Bitcoin reserve strategy and non-cash fair value adjustments related to its Bitcoin holdings from adjusted EBITDA to more accurately reflect the core business performance.


In 2025, Core Consumer Food Business Adjusted EBITDA is expected to be between $5.5 million and $6 million.


Bitcoin Reserve Update


In the first half of 2025, DDC initiated a long-term Bitcoin accumulation strategy, holding Bitcoin as its primary reserve asset.


As of December 31, 2025: The company holds 1,183 BTC.


As of February 28, 2026: Holdings increased to 2,118 BTC


Today's additional purchase of 65 BTC brings the company's total holdings to 2,183 BTC


DDC Founder, Chairman, and CEO Norma Chu stated, "We are proud to have closed 2025 with record revenue and positive adjusted EBITDA, demonstrating the steady growth of the company's consumer food business and the ongoing improvement in profitability. We are building a disciplined, growth-oriented food platform and strategically allocating capital to Bitcoin assets with a long-term view, aligning with our core beliefs. We believe that this dual-track model of 'Steady Consumer Business + Strategic Bitcoin Reserve' will help DDC create lasting long-term value for shareholders."


Adjusted EBITDA Definition
For the full year 2025, the company defines "Adjusted EBITDA" (a non-GAAP financial measure) as: Net income / (loss) excluding the following items:· Interest expense· Taxes· Foreign exchange gains/losses· Long-lived asset impairment· Depreciation and amortization· Non-cash fair value changes related to financial instruments (including Bitcoin holdings)· Stock-based compensation


About DDC Enterprise Limited


DDC Enterprise Limited (NYSE: DDC) is actively implementing its corporate Bitcoin Treasury strategy while continuing to strengthen its position as a leading global Asian food platform.


The company has established Bitcoin as a core reserve asset and is executing a prudent, long-oriented accumulation strategy. While expanding its portfolio of food brands, DDC is gradually becoming one of the public company pioneers in integrating Bitcoin into its corporate financial architecture.


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