Silicon Valley Bank Implosion Whipped Up Frenzy of DeFi Transactions As Crypto Assets Rebounded: DappRadar

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Sil­i­con Val­ley Bank’s (SVB) high-pro­file implo­sion last week whipped up a fren­zy of decen­tral­ized finance (DeFi) trans­ac­tions, accord­ing to mar­ket intel­li­gence plat­form DappRadar.

Dap­pRadar notes in a new report that DeFi tends to be high­ly sus­cep­ti­ble to mar­ket con­cerns and crashes.

Last week­end, USD Coin (USDC) lost its peg to the US dol­lar fol­low­ing news that Cir­cle, the stablecoin’s issuer, had $3.3 bil­lion of its $40 bil­lion reserves stuck in the col­lapsed SVB. The sec­ond-largest sta­ble­coin by mar­ket cap dropped as low as $0.8788 before reclaim­ing its peg on Monday.

This roller­coast­er had a rip­ple effect on the DeFi sec­tor, explains DappRadar.

“On 11 March, fol­low­ing the SVB crash and USDC depeg­ging, the DeFi mar­ket expe­ri­enced a sig­nif­i­cant drop in its TVL, falling by 9.6% from $79.28 bil­lion to $71.61 bil­lion. The news cre­at­ed pan­ic among investors, lead­ing to a con­sid­er­able sell-off and a decrease in the TVL.

For­tu­nate­ly, on Mon­day 13th, USDC reserve deposit held at Sil­i­con Val­ley Bank was ful­ly avail­able to the pub­lic, which helped sta­bi­lize the mar­ket. This announce­ment led to a 13% spike in DeFi TVL, reach­ing $81.15 billion.”

TVL stands for “total val­ue locked,” which rep­re­sents the total cap­i­tal held with­in a blockchain’s smart con­tracts. TVL is cal­cu­lat­ed by mul­ti­ply­ing the amount of col­lat­er­al locked into the net­work by the cur­rent val­ue of the assets.

Dap­pRadar notes that the num­ber of unique active wal­lets inter­act­ing with DeFi con­tracts surged from 421,026 on March 8th to 477,094 on March 11th, a 13% increase. Trans­ac­tion count increased by 23% from 1,356,483 to 1,668,992.

The decen­tral­ized exchange (DEX) Uniswap (UNI) was behind that activ­i­ty surge, accord­ing to the mar­ket intel­li­gence platform.

“Uniswap V3, one of the most pop­u­lar decen­tral­ized exchanges, expe­ri­enced a sig­nif­i­cant increase in UAW, sur­pass­ing 67,000 on Sat­ur­day March 11th, with a vol­ume of $14.4 bil­lion, the high­est fig­ure ever reg­is­tered for V3. The 67,000 UAW were the high­est reg­is­tered on a Uniswap Dapp since sum­mer of 2021.

More­over, Uniswap V3 avg. trans­ac­tion size on Sat­ur­day was $170,080, almost dou­ble than the mean, sig­nal­ing that Ethereum DeFi whales were high­ly active dur­ing last weekend.”

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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

Gen­er­at­ed Image: Midjourney



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