Decentralized cryptocurrency exchange Uniswap. It announced that on March 11 it had recorded the highest ever daily trading volume of $11.84 billion. Decentralized exchange (DEX) Uniswap recorded such high trading volumes over the weekend. After traders rushed to dump the stablecoin cryptocurrency (USDC). And exchange it for other cryptocurrencies.
According to data from the Dune website, which specializes in analyzing blockchain networks. The volume of trading on the decentralized exchange has more than doubled compared to the highest historical level recorded in November 2021, which represents a milestone for the decentralized trading protocol.
Over the course of 24 hours, from Saturday to Sunday, Uniswap has processed nearly $12 billion in trading volumes.
The goal of the traders was to get rid of USDC
The rise in trading volumes on Uniswap was driven by the de-pegging of USDC from the US dollar. And that during the weekend after the collapse of three banks in the United States, which are Signature, Silvergate and Silicon Valley Bank.
Traders on the platform focused on exchanging the stablecoin USDC for tokens WETH, another stablecoin (USDT), and stablecoin Dai (DAI).
Over the course of seven days, volumes of $15 billion were traded on USDC currency pairs - with the majority occurring between March 10 and March 12, according to data from Dune.
Decentralized exchanges (DEXs) such as Uniswap rely on smart contracts without human intervention to perform financial transactions on the platform such as trading, lending or borrowing. Investors can work with the platform as liquidity providers.
This is done by depositing and mortgaging encrypted digital currencies in the so-called liquidity pools or basins in exchange for returns and rewards. It is part of the fees paid by traders who use the services of the trading platform.
The decentralized exchange's huge trading volumes brought it fee revenues of about $8 million. The bulk of this revenue went to Uniswap Labs, the owner of the trading platform. And the rest goes into the pocket of liquidity providers.
On the other hand, the stablecoin exchange platform Curve. It recorded nearly $8 billion in trading volume in just 24 hours. A weekly increase of 991%. One of the most used liquidity pools has seen pressure and high demand. After investors and traders rushed to exchange USDC for other digital currencies.
Panic and then stability returns to the cryptocurrency market
The USDC stablecoin issued by Circle has lost its peg to the US dollar. It fell below the parity level until it reached $0.88, after being exposed to a large wave of selling.
Because of concerns that the issuing company might lose its cash reserves that support the stablecoin mechanism. Which was putting part of these reserves, which amounted to 3.3 billion in the collapsed Silicon Valley Bank SVB.
It also sparked a major sell-off in the entire cryptocurrency market over the weekend. With bitcoin falling from under the $20,000 level to $19,200.
However, Bitcoin (BTC) and Ether (ETH) are up 10% over the past 24 hours to recoup all of Monday's weekend losses. This state of panic did not last long, after the financial authorities in the United States of America decided to intervene to calm the fears in the markets. And preserving the stability of the banking system from any wave of panic and attacks to withdraw money from other banks.
A joint statement was issued by the US Treasury and the Federal Reserve Bank confirming that all Silicon Valley bank customers can withdraw their deposits in full when the markets open on Monday.
Among those clients is USDC cryptocurrency issuer Circle. Which announced that it has recovered all its reserves and that the stablecoin is safe. These moves have restored calm to the cryptocurrency market.
By Tuesday, USDC had regained parity with the US dollar. Bitcoin recorded an increase of more than 15% in the previous 7 days, and surpassed the $26,000 level.
