• MakerDAO’s decentralized stablecoin, DAI, depegged to an all-time low of 88 cents on Saturday.
• The sudden collapse of tech-focused Silicon Valley Bank is being blamed for the drop in DAI pricing.
• Other algorithmic stablecoins like Curve 3pool and Tron’s USDD have also been knocked off their pegs.
Stablecoin Rout Plagues Crypto Markets
The crypto markets were hit with a sudden shock recently when tech-focused Silicon Valley Bank suddenly collapsed. Since then, many stablecoins have been affected by this incident and are now trading at all-time lows. The most prominent amongst these stablecoins is MakerDAO’s decentralized token DAI, which has dropped to an all-time low of 88 cents as a result of the market conditions.
USDC Exposure and Silvergate Liquidation
Traders are speculating that Circle, who issues USDC, has worse exposure to SVB than the $3.3 billion out of the total $40 billion backing USDC they previously disclosed. On top of this, Silvergate had gone into voluntary liquidation days prior to this event – further adding fuel to the fire regarding USDC exposure.
$563 Million in DAI Burned in 24 Hours
On-chain data from Dune shows that $563 million worth of DAI was burned in the last 24 hours alone due to traders fleeing from USDC and other related assets. This has caused the total market cap for DAI to fall down to a total of $4.9 billion as a result of this selloff.
Tron’s USDD Also Hit
Not only has DAI been affected by this incident – Tron’s USDD has also seen its peg broken after it dropped down 93 cents during Asian afternoon hours on Saturday. Tether remains pegged at 1 dollar however – despite the market chaos occurring around it with other algorithmic tokens such as Curve 3pool also seeing their liquidity pool take a hit due to traders fleeing USDC as well..
Conclusion
Crypto markets remain volatile following this incident – with many algorithmic tokens still feeling its effects even days later after it occurred. It will be interesting to see whether or not these tokens can recover following this period or if they will continue dropping further in value over time