Posted inNews

Insolvency fears led many to turn to other stablecoins, sell USDC at a major discount

March 12, 2023No Comments


Multiple USD currencies (USDCHolders of ) have fled to other stablecoins since March 10 amid fears surrounding their solvency following the revelation that a small portion of USDC collateral was held at Silicon Valley Bank.

However, not all of them were successful during panic sales. A user paid over 2,000,000 USDC to receive $0.05 of Tether (USDT) by dumping a large amount of 3CRV (DAI/USDC/USDT) into USDT.

The KyberSwap aggregation router was used in the transaction. Kyberswap is a decentralized exchange (DEX) that aggregates liquidity from various DEXs. In an autopsy, the protocol team explained that "since the market was going through a volatile period, all the routes failed to estimate the gas. The rate fluctuated strongly and only the 0x route was successful but with a very low rate."

After confirming the trade at the 0x rate in a pop-up window, a bot spotted the opportunity and won 2,085,256 USDC from that Univ2 pool. The protocol is in discussion with the bot creator, the bot user and third parties to help with the recovery of funds.

Also moving funds to other stablecoins, Tron founder Justin Sun reportedly Withdrew 82 million USDC using the Aave v2 decentralized finance protocol and exchanged it for Dai (ICD), with a value of almost 75 million dollars.

IOSG Ventures-related wallets sold 118.73 million USDC for 105.67 million USDT, as well as 2,756 Ether (ETH) worth $3.98 million via three addresses, on-chain data shows. The institution still has almost 45 million in USDC.

The USDC price is slowly recovering after the turbulent trading hours on March 11 to trade at $0.97 at press time.

Circle, the company behind the USDC, revealed having $3.3 billion in Silicon Valley Bank, almost 23% of its reserves. the bank was closed by California authorities on March 10 after disclosing efforts to raise additional capital.

Circle said in a recent statement that USDC liquidity operations "will resume as normal when banks open Monday morning in the United States", allowing USDC to be swapped at a 1:1 ratio against the US dollar.