Silicon Valley Bank Implosion Whips Up DeFi Transaction Frenzy As Crypto Assets Come Back: 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 vulnerable to market problems and crashes.
Last weekend, USD Coin (USDC) lost its peg to the US dollar following the news that Circle, the stablecoin 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 roller coaster had a ripple effect on the DeFi sector, explains DappRadar.
“On March 11th, after the SVB crash and USDC depegging, the DeFi market experienced a significant drop in TVL, falling by 9.6% from $79.28 billion to $71.61 billion. The news created panic among investors, which led to a significant sell-off and a decline in TVL.
Fortunately, on Monday the 13th, USDC reserve deposits held at Silicon Valley Bank were fully accessible 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 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 rose 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.
Decentralized exchange (DEX) Uniswap (UNI) was behind that increase in activity, according to the market intelligence platform.
“Uniswap V3, one of the most popular decentralized exchanges, experienced a significant increase in UAW, passing 67,000 on Saturday, March 11, with a volume of $14.4 billion, the highest figure ever recorded for V3. They 67,000 UAW was the highest recorded on a Uniswap Dapp since summer 2021.
Also, Uniswap V3 avg. the transaction size on Saturday was $170,080, almost double the average, signaling that Ethereum DeFi whales were very active over the past weekend.”
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