There has been another uproar in the world of crypto in recent days. Decentralized crypto exchanges have reached an all-time high in daily trading volume, partly due to a depeg from the second largest stablecoin. In this article, we will provide more insight into these events and what this means for the crypto industry.
Record trading volume on decentralized exchanges after depeg USDC
On Saturday, March 13, 2023, decentralized exchanges hit another milestone, with a record daily trading volume of $25 billion, according to data from Defillama. This surpasses the previous high reached in May 2021, when Bitcoin (BTC) was worth about $65,000 and Ether (ETH) was worth $4,400.
The recent depeg of the second largest stablecoin, USD Coin (USDC), sparked a wave of panic in the market, leading to an explosion in trading activity. The majority of this trading took place on the decentralized exchange Uniswap, with a weekly volume of $31.7 billion.
However, Circle, the USDC issuing company, has brought some reassuring news by confirming that each USDC coin is still backed by one US dollar, despite the company having exposure to the $3 billion Silicon Valley Bank troubled. However, the CEO indicated yesterday that the company now has access to these funds again.
Increase in trading volume in the DeFi sector
In any case, the decentralized nature of the crypto sector has ensured that the USDC devaluation did not affect the entire industry. Trading volume in the DeFi sector has actually increased in the wake of the depeg with a weekly increase of 255%, according to DefiLlama.
Notably, traders in the USDC still have confidence in the stablecoin as there has been a surge in on-chain leveraged positions, with $70 million at stake if the stablecoin were to lose value again. This shows that the crypto industry still has faith in the USDC, despite the recent problems.