At 10 March lost Circle’s USD Coin (USDC) suddenly lost its solid link with the dollar after one of the banks where USDC’s collateral was held went bankrupt. As a result, many people dumped the token en masse due to the panic. However is becoming the coin slowly popularder, according to CoinDesk.
USDC less popular due to banking crisis
The crypto newspaper spoke to analysts from blockchain research firm Kaiko. The researcher Riyad Carey stated that the selling pressure has eased, and on 3pole of the Decentralized Finance (DeFi) protocol Curve, USDC’s market share has increased. 3Pool is an important part of the protocol that allows users to trade USDT, USDC and DAI. It currently manages nearly $440 million in stablecoins.
From dates of Dune Analytics shows that traders during the trouble with USDC dumped the token in a big way. USDC made up just 2.4% of the liquidity in the pool at the low point. People sold their USDC for USDT in a big way. The latter then climbed to 50% of the pool. DAI also benefited somewhat, growing from around 36% of the liquidity in the pool to 46%.
USDC popularity grows again on Curve
Now the situation is different. USDC makes up about 24% of the market. USDT and DAI account for rounded 39% and 37% respectively. USDC has therefore recovered, but USDC has not really recovered yet. The token peaked in May of 2022 with 82% of liquidity on Curve’s liquidity pool.
It must be said that there appears to be an error in Dune’s data. There you see that USDT was hardly used and USDC was. However, this will not be true, considering that the market value of USDT grew strongly during this period and USDC shrank.
USDC is also still very popular within DeFi, according to CoinDesk. Various DeFi protocols and bridges still hold USDC in their reserves. Like this MakerDAO concluded last week to keep holding the coin as collateral. There was a lot of doubt about that when the coin became unstable. It reflects MakerDAO’s mistrust of USDC, sparked last year by discussions of centralization.