The USD Coin (USDC) depegged from the dollar due to a subsequent sell-off because Silicon Valley Bank (SVB) did not complete $3.3 billion of Circle’s $40 million transfer request, having an immediate impact on the stablecoin ecosystem. Due of USDC’s collateral influence, significant stablecoin ecosystems depegged from the US dollar in a similar fashion.
MakerDAO’s stablecoin Dai (DAI) lost 7.4% of its value as a result of USDC’s depegging. Data from Statista indicates that as of June 2022, the $6.78 billion DAI supply was backed by $8.52 billion in cryptocurrencies.
As of June 27, 2022, the total value of DAI‘s crypto assets used for on-chain collateralization. from Statista.
Out of the total, USDC accounted for 51.87% of DAI’s $4.42 billion in collateral. Ether (ETH) and Pax Dollar (USDP), which have respective market caps of $0.66 billion and $0.61 billion, are two other well-known cryptocurrencies.
DAI depegged from the dollar as a result, briefly touching $0.897. The stablecoin bounced back to trade near $0.92.
Due to negative market emotions, the fractional-algorithmic stablecoin Frax (FRAX) and Tron’s USD Digital (USDD) stablecoin both suffered comparable outcomes. In response to the USDC sell-off, USDD fell by about 7.5% to trade at $0.925, while FRAX fell even lower to $0.885.
