Stablecoin trading platform Curve Finance has set a new record for daily trading volume, with figures topping $7 billion in the aftermath of the Silicon Valley Bank (SVB) closure and the resulting depreciation of USD Coin (USDC).
Curve facilitates swaps between major stablecoins, such as USDC, Tether (USDT), Frax (FRAX), Dai (DAI) as well as TrueUSD (TUSD). The recent market uncertainty has caused out-of-balance pools in the DeFi platform, with USDC dropping below its $1 peg and DAI losing 5% of its value.
USDC is the second-largest stablecoin, valued at over $42 billion and utilized as collateral in multiple stablecoin ecosystems. The repercussions of its depreciation have been felt across the market, with MakerDAO filing an “urgent executive proposal” to protect DAI from USDC losses. MakerDAO is one of the biggest USDC holders, having 3.1 billion tokens in reserve as backing for DAI.
The depeg was caused by the closure of the Silicon Valley Bank, with the California Department of Financial Protection and Innovation appointing the Federal Deposit Insurance Corporation (FDIC) as the receiver. According to reports, large crypto investors have been selling off their assets in an attempt to avoid further losses, with Circle – the company behind USDC – disclosing that $3.3 billion of the $40 billion in reserves had been locked in the SVB.
Dave Weisberger, co-founder and CEO of algorithmic-trading platform CoinRoutes, commented to Cointelegraph that the “fodder for a broader contagion event is there”, potentially endangering many tech businesses in the U.S. and hampering the “sustained growth of the American economy.”