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Users flock to Curve amid lack of stablecoin liquidity on major DEXs

A concentration of stablecoins on a couple of platforms has drained liquidity from others.


In a Tweet announced by user @cryptotutor weekday, a screenshot seems to indicate a twenty-seventh unfold between stablecoin Magic net cash (MIM) and USD Coin (USDC) mercantilism combined on the localized exchange, or DEX, Uniswap (UNI). Each has a theoretical peg of 1:1 against the U.S. Dollar.

“Magic net cash,” joked cryptotutor, as he tried to swap just about $1 million in MIM however received a quote for under 728.6k USDC. Others quickly took to social media to complain likewise. In another screenshot, user @DeFiDownsin allegedly received a quote to swap the $984k value of MIM for simply four 173 in USDT on SushiSwap (SUSHI).

Curve, a well-liked platform for stablecoin mercantilism, offered its insight on the matter. “Uniswap truly currently works far better than what the screenshot shows, and Sushiswap is simply unsuitable for stablecoin-to-stablecoin swaps perpetually,” aforesaid the Curve team via a tweet. During bear markets, investors generally take to the woods from holding volatile cryptocurrencies and instead pile into stable assets that generate fastened financial gain.

 For example, the quantity of deposits in Terra Luna’s flagship stablecoin savings protocol, Anchor, which guarantees yields of up to twenty, has inflated from $2.3 billion to $6.1 billion within the past sixty days. However, the capital flight has conjointly resulted in problems, like stablecoin liquidity disappearing from exchanges, inflicting they unfold to widen to torturesome levels. Additionally, the flock of stablecoins into the Anchor protocol has caused its yield to become unsustainable as there aren’t enough borrowers to pay depositors’ interest.

But despite giant fluctuations within the market, Curve seems to be doing higher than ever. In step with its developers, the platform saw a record mercantilism daily volume of $3.6 billion, with total deposits surpassing $16.7 billion. Investors generally look to require advantage of the rare distinction between stable coins theoretical peg to paper currency or different stablecoins to form a profit.


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