Since March 10, some U.S. dollar coin (USDC) holders have fled to other stablecoins amid concerns over its solvency after it was revealed that a small portion of USDC’s collateral was held by Silicon Valley Bank.
However, not everyone has been successful in panic selling. A user paid over 2,000,000 USDC for $0.05 of Tether (USDT) by transferring 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 pools liquidity from multiple DEXs. In a post-mortem analysis, the protocol team explained, “Because the market was in a period of turmoil, gas estimates were not available for all routes. The rate fluctuated wildly, and only the 0x route was successful, but the rate was very low.”
After confirming the exchange in the popup window at an exchange rate of 0x, the bot detected the opportunity and received 2,085,256 USDC from this Univ2 pool. The agreement is being negotiated with bot creators, bot users, and third parties to assist in recovering funds.
Tron founder Justin Sun also reportedly moved funds to other stablecoins, using decentralized finance protocol Aave v2 to withdraw $82 million and swap it for nearly $75 million worth of Dai (DAI). On-chain data shows that wallets associated with IOSG Ventures sold $118.73 million in USDC for $105.67 million and 2,756 ether (ETH) worth $3.98 million through three addresses. The institution still holds nearly $45 million in USDC. USDC price is slowly recovering after a volatile trading session on March 11, trading at $0.97 at the time of publication.
Circle, the company behind USDC, disclosed it holds $3.3 billion in Silicon Valley Bank, nearly 23 percent of its reserves. The bank was shut down by California authorities on March 10 after disclosing efforts to raise additional funds. Circle said in a recent statement that USDC’s liquidity operations will “return to normal when Bank of America opens its doors Monday morning,” enabling USDC to USD 1:1 redemptions.
