Lista DAO Faces Vault Liquidation as Utilization Hits 99%

The DeFi space just saw another tense moment as Lista DAO’s lending vaults, managed by MEV Capital and Re7 Labs, hit 99% utilization, triggering a forced liquidation across key markets.

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.

Lista DAO confirmed that it has been closely monitoring both the @MEVCapital USDT Vault and @Re7Labs USD1 Vault, where collateral assets $sUSDX and $USDX were facing abnormally high borrowing rates with no repayment activity for days.

As an on-chain P2P lending protocol, Lista Lending said it had been actively engaging both teams to address the situation before it worsened. But with borrowing costs spiraling and repayment volumes stalled, the DAO had little choice but to act.

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

Within minutes, governance participants began casting votes. The response was decisive.

“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 wrote 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.

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

Lista DAO credited Re7 Labs for taking proactive steps in users’ best interest and maintaining transparency throughout the liquidation.

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

The liquidation, it added, was being actively handled and was nearly complete, with final settlement data still under verification.

The liquidation process involved several coordinated steps to unwind risk and recover funds:

1. Liquidation Process, Nearly all debt positions have been processed. A small portion remains under 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 the calculations are finalized.

3. Public Liquidation Pool, Remaining unliquidated positions have been moved to the public liquidation pool, opening up the process to community participation.

4. Rate Adjustment, The USDX/USD1 market interest rate was adjusted to 3%, since there’s no reason to keep accruing interest while liquidation is ongoing.

According to Lista DAO’s official data released at 20:57 UTC+8, Nov. 6, 2025, the liquidation activity for the Re7 Vault (USDX Market) showed significant movement:

Flash Loan Liquidation:

Liquidated: 3,526,011 USDX

Recovered: 2,927,163 USD1

Penalty Fees:

•   Due to oracle price adjustments, a wider price gap caused higher penalty fees.
•   In total, 474,798.48 USD1 in penalties were collected and will be used to repurchase collateral as part of the recovery process.

Remaining Vault Debt:

•  Around 2,090,459.901 USD1 has been moved to the public liquidation zone, now open for anyone to participate.

Re7 Vault (USDX market) Liquidation Summary

Statistics by 2025/11/06 20:57 UTC+8:
1️⃣ Flash Loan Liquidation
– Liquidated: 3,526,011 USDX
– Recovered: 2,927,163 USD1

2️⃣ Penalty Fees
– Due to oracle adjustments, a wider price gap resulted in higher liquidation penalty fees.
– A… https://t.co/LKeWhNMajj pic.twitter.com/xBnJBkBLQf

— Lista DAO (@lista_dao) November 6, 2025

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

That drop caught the attention of traders, and one whale in particular moved fast.

Wallet 0xe454, often tracked by on-chain analysts, spent 800,000 USDT to buy 933,241 USDX at an average of $0.8572 shortly after the depeg was noticed.

He already held 1.4 million USDX, bought a week earlier, and submitted the entire batch for redemption.

If the redemption succeeds, he stands to make around $135,000 in profit, a bold play amid volatile conditions.

However, three hours later, there’s still no confirmation of a successful redemption, raising questions about processing delays or liquidity constraints.

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

Re7 Labs has continued to provide technical support, while community members are encouraged to join 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.

While Lista DAO’s situation is being handled, the event underscores a larger concern across decentralized finance: liquidity strain and over-leveraged vaults.

With utilization rates on many DeFi platforms now exceeding 90%, similar risks could emerge elsewhere. Analysts warn that tight liquidity can amplify depeg events, force liquidations, and test the resilience of lending protocols.

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

As the liquidation wraps up, all eyes are on USDX’s 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 trust, but it’s a stark reminder of how fast things can turn in DeFi.

Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.

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