Silicon Valley Bank Implosion Whips Up DeFi Transaction Frenzy As Crypto Assets Return: DappRadar

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 problems and crashes.

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

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

“On March 11, after the SVB crash and USDC untying, the DeFi market saw a significant drop in its TVL, falling 9.6% from $79.28 billion to $71.61 billion. The news created panic among investors, which led to a significant divestment and a drop in TVL.

Fortunately, on Monday the 13th, the USDC reserve deposit at Silicon Valley Bank was fully available to the public, helping to stabilize the market. This announcement led to a 13% increase 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 security locked in the network by the current value of the assets.

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

The decentralized exchange (DEX) Uniswap (UNI) was behind this increase in activity, according to the market information platform.

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

Also, Uniswap V3 average transaction size on Saturday was $170,080, almost double the average, signaling that Ethereum DeFi whales were very active last weekend.”
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