• Curve Finance achieved a record $7 billion in daily trading volumes on March 11.
• The surge in trade volume was caused by the USDC depeg from the US dollar, which triggered a wave of uncertainty across markets.
• MakerDAO submitted an “urgent executive proposal to limit risks to the protocol” to avoid panic selling, and Circle announced new USDC minting.
Curve Finance Achieves Record Trading Volume
Curve Finance saw unprecedented success on March 11, smashing previous records with over $7 billion in daily trading volumes. This surge in activity was caused by the recent depegging of USD Coin (USDC) from its link to the US dollar, which triggered a wave of uncertainty throughout cryptocurrency markets.
Impact on Stablecoins
The three most prominent stablecoins – USDC, Tether (USDT), and TrueUSD (TUSD) – are all supported by Curve’s liquidity pools. As a result of this sell-off of USDC, imbalanced pools have caused its value to drop below its $1 peg. In response, MakerDAO submitted an “urgent executive proposal to limit risks to the protocol” and avoid any further panic selling.
Circle Announces New USDC Minting
As USD Coin bulls remain active despite this depegging event, traders have seen it increase 4.5% in price valuation at the time of writing. Its market cap has also increased 4%, reaching nearly $41 billion as of now. To help stabilize its value again, Circle has announced new minting for USDC tokens so that more can be added into circulation if needed.
Effects on DeFi Protocols and Markets
The collapse of Silicon Valley Bank (SVB) is continuing to cause ripple effects across both decentralized finance protocols and traditional financial markets alike. MakerDAO is one major holder of USDC with reserves worth approximately $2.85 billion tokens; therefore it remains particularly vulnerable to such fluctuations in value due to its own reliance on collateralized debt positions (CDPs).