Debugging USD coin (USDC) and Dai (DAI) from the US dollar sparked a loan repayment frenzy over the weekend, allowing borrowers to save a total of more than $100 million on their loans.
After the collapse of Silicon Valley Bank on March 10, the price of USDC dropped to a low of $0.87 March 11 due to concerns about locking up its reserves in SVB.
MakerDAO’s DAI stablecoin also briefly untiedOn March 11th, it will drop to $0.88, according to on CoinGecko.
Debugging amid broader crypto turmoil led to more than $2 billion in loan repayments on decentralized lending protocols Aave and Compound on March 11 — with more than half made in USDC, according to message digital asset data provider Kaiko.
Another $500 million in debt was paid in DAI on the same day, he noted.
This was decreasing as both USDC and DAI began to head back towards their pegs. The following days didn’t have nearly as many repayments, with total Tether loan repayments of only about $500 million (USDT), USDC, DAI and other coins on March 12th and about half of that on March 13th.
Blockchain analytics company Flipside Crypto estimates that USDC borrowers saved $84 million as a result of loan repayments stablecoin has been unlinkedwhile those using DAI saved $20.8 million.
“Overall, DeFi markets experienced two days of huge price swings that created countless arbitrage opportunities across the ecosystem and highlighted the importance of USDC,” Kaiko said in a report.
Related: USDC debugged but won’t default
Debugging USDC also led to MakerDAO reassess your USDC exposureas crypto projects incorporating DAI into their tokenomics suffered losses as a result of the chain reaction.
Circle’s USDC started climbing back to $1 confirmation from CEO Jeremy Allaire that its reserves are safe and the firm has new banking partners lined up, along with government assurances that SVB’s depositors will be whole.
According to CoinGecko dataUSDC is sitting at $0.99 at the time of writing.