{"id":562359,"date":"2023-03-11T13:44:00","date_gmt":"2023-03-11T10:44:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/circles-usdc-instability-causes-domino-effect-on-dai-usdd-stablecoins\/"},"modified":"2023-03-11T13:44:00","modified_gmt":"2023-03-11T10:44:00","slug":"circles-usdc-instability-causes-domino-effect-on-dai-usdd-stablecoins","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/circles-usdc-instability-causes-domino-effect-on-dai-usdd-stablecoins\/","title":{"rendered":"# Circle\u2019s USDC instability causes domino effect on DAI, USDD stablecoins"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a251a5155b7f\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a251a5155b7f\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/circles-usdc-instability-causes-domino-effect-on-dai-usdd-stablecoins\/#%E2%80%9D_Circles_USDC_instability_causes_domino_effect_on_DAI_USDD_stablecoins_%E2%80%9C\" >&#8221; Circle\u2019s USDC instability causes domino effect on DAI, USDD stablecoins &#8220;<\/a><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9D_Circles_USDC_instability_causes_domino_effect_on_DAI_USDD_stablecoins_%E2%80%9C\"><\/span>&#8221; Circle\u2019s USDC instability causes domino effect on DAI, USDD stablecoins &#8220;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<div class=\"post-content\" data-v-48054ca8>The stablecoin ecosystem felt an im<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">media<\/a>te effect as USD Coin (USDC) depegged from the US dollar due to a subsequent sell-off after Silicon Valley Bank (SVB) did not process $.3.3 billion of Circle\u2019s $40 million transfer request. Given USDC\u2019s collateral influence, major stablecoin ecosystems followed suit in depegging from the dollar.<\/p>\n<p>Dai (DAI), a stablecoin issued by MakerDAO, lost 7.4% of its value as a result of USDC\u2019s depegging. As of June 2022, $6.78 billion worth of DAI supply was collateralized by $8.52 billion worth of cryptocurrencies, confirms <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.statista.com\/statistics\/1316928\/dai-reserves-breakdown\/\">data<\/a>\u00a0from Statista. <\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2023-03\/bceadfe5-5116-4abd-9066-876acef65a69.png\"><figcaption style=\"text-align: center;\"><em>Dai&#8217;s total crypto assets used for on-chain collateralization as of June 27, 2022. Source: Statista<\/em><\/figcaption><\/figure>\n<p>Out of the lot, USDC represented 51.87% of DAI\u2019s collateral, worth $4.42 billion. Other prominent cryptocurrencies include Ether (ETH) and Pax Dollar (USDP) at $0.66 billion and $0.61 billion respectively.<\/p>\n<p>As a result, DAI depegged from the dollar to momentarily touch $0.897. The stablecoin recovered to trade around the $0.92 mark at the time of writing, as shown below.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2023-03\/3ddf0868-a388-4775-ba65-ebee200549b9.png\"><figcaption style=\"text-align: center;\"><em>DAI to USD 1-day chart. Source: CoinMarketCap<\/em><\/figcaption><\/figure>\n<p>USD Digital (USDD), another stablecoin issued by Tron blockchain, and fractional-algorithmic stablecoin Frax (FRAX) shared a similar fate due to negative market sentiments. USDD responded to the USDC sell-off with a nearly 7.5% drop to trade at $0.925 while FRAX dipped even further to $0.885. <\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2023-03\/911bdf9b-ad0d-407a-93e8-c2a0023c8797.png\"><figcaption style=\"text-align: center;\"><em>USDD to USD 1-day chart. Source: CoinMarketCap<\/em><\/figcaption><\/figure>\n<p>Other popular cryptocurrencies, such as Tether (USDT) and Binance USD (BUSD), continue to maintain a 1:1 peg with the US dollar. <\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>USDC investor shells out $2M to receive $0.05 USDT trying to evade crash<\/em><\/strong><\/p>\n<p>The entire depegging ordeal started after Circle announced that $3.3 billion of its funds were not processed for withdrawal by SVB. <\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">1\/ Following the confirmation at the end of today that the wires initiated on Thursday to remove balances were not yet processed, $3.3 billion of the ~$40 billion of USDC reserves remain at SVB.<\/p>\n<p>\u2014 Circle (@circle) <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/circle\/status\/1634391505988206592?ref_src=twsrc%5Etfw\">March 11, 2023<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>SVB was ordered to shut down by the California Department of Financial Protection and Innovation for undisclosed reasons. However, the California regulator <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ointed the Federal Deposit Insurance Corporation as the receiver to protect insured deposits.<\/p>\n<p><template data-name=\"subscription_form\" data-type=\"markets_outlook\"><\/template><\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/circle-s-usdc-instability-causes-domino-effect-on-dai-usdd-stablecoins\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8221; Circle\u2019s USDC instability causes domino effect on DAI, USDD stablecoins &#8220; The stablecoin ecosystem felt an immediate effect as USD Coin (USDC) depegged from the US dollar due to a subsequent sell-off after Silicon Valley Bank (SVB) did not process $.3.3 billion of Circle\u2019s $40 million transfer request. Given USDC\u2019s collateral influence, major stablecoin&#8230;<\/p>\n","protected":false},"author":1,"featured_media":562360,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/cdn-cgi\/image\/format=auto,onerror=redirect,quality=90,width=1200\/https:\/\/s3.cointelegraph.com\/uploads\/2023-03\/58a645b8-b8a9-4b3b-bfea-39daa80116a8.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74867,138848,76701,77655,76700,75493,82350,117,36041],"class_list":["post-562359","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-altcoin","tag-binance-usd","tag-dai","tag-maker","tag-makerdao","tag-stablecoin","tag-usd-coin","tag-business","tag-tether"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/562359","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=562359"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/562359\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/562360"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=562359"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=562359"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=562359"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}