Stablecoin conversion pool Curve Finance is experiencing the highest daily trading volume in its history, surpassing $7 billion in the last 24 hours, after the failure of Silicon Valley Bank (SVB) triggered a wave of uncertainty in the markets and caused the stablecoin USD Coin (USDC) to lose its peg to the US dollar.
Looks like we have the biggest daily trading volume in history
— Curve Finance (@CurveFinance) March 11, 2023
It looks like we have the largest daily trading volume ever.
Curve offers liquidity pools for major stablecoins such as USDC, Tether (USDT), Frax (FRAX), Dai (DAI), and TrueUSD (TUSD). FUD has been sweeping across cryptocurrency markets for the past few hours, causing an imbalance in the DeFi platform’s pools due to a USDC sell-off, which has led to the price of the stablecoin falling below its parity of USD 1.
USDC is the second largest stablecoin, with a market capitalization of over $42 billion as of January 31, and serves as collateral for many stablecoin ecosystems. His divestment had an immediate effect on other stablecoins such as DAI, issued by MakerDAO, which is down 5% at press time.
To prevent panic selling, MakerDAO submitted an “urgent executive proposal to mitigate protocol risks” on March 11 to restrict DAI minting with USDC. MakerDAO is one of the largest holders of the stablecoin, with more than 3.1 billion USDC ($2.85 billion) in reserves collateralizing DAI. As we told you earlier today, the cryptocurrency whales have posted heavy losses and seem to be moving their assets in an attempt to preserve capital.
Circle, the company behind USDC, revealed on March 11 that $3.3 billion of its $40 billion of reserves were locked up at Silicon Valley Bank, shut down the day before by the California Department of Financial Protection and Innovation. The regulator also appointed the Federal Deposit Insurance Corporation (FDIC) as receiver to protect insured deposits.
Silicon Valley Bank is one of six banking partners Circle uses for managing the ~25% portion of USDC reserves held in cash. While we await clarity on how the FDIC receivership of SVB will impact its depositors, Circle & USDC continue to operate normally.https://t.co/NU82jnajjY
—Circle (@circle) March 10, 2023
Silicon Valley Bank is one of six banking partners Circle uses to manage ~25% of USDC’s cash reserves. Pending clarification on how the FDIC receivership of SVB will affect their depositors, Circle and USDC continue to operate as normal.
Speaking to Cointelegraph, Dave Weisberger, co-founder and CEO of algorithmic trading platform CoinRoutes, said the “fodder for a broader contagion event is there” and that “the spark could be materializing,” putting many startups at risk. and technology companies in the country, a critical sector for the “sustained growth of the American economy.”
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