Some debtors seem to have used the drop in USDC and DAI prices to their advantage.
Debtors seized the opportunity to earn a total of over $100 million in discounts on their loan repayments when USD Coin (USDC) and Dai (DAI) stablecoins lost their $1 peg over the weekend.
The fall of Silicon Valley Bank (SVB) on March 10th caused the USDC price to drop to an all-time low of $0.8774 on March 11th. The price slump came after Circle, the issuer of the USDC announced that it had over $3 billion of deposits with SVB.
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DAI, MakerDAO’s stablecoin, also de-pegged, dropping to an all-time low of $0.897 on March 11th.
The price slump of DAI and USDC prompted a massive loan repayment totaling more than $2 billion on March 11th. The repayments were made on the leading decentralized lending platforms, Aave and Compound.
Kaiko, a digital data provider, reported that over $1 billion of the loan repayment was made in USDC, while DAI debtors made debt repayments worth over $500 million.
Aave and Compound borrowers took advantage of USDC's de-peg to repay their loans; over $1bn USDC was repaid on Aave on March 11th alone.
The loan repayment rate declined as the prices of the stablecoin started rising toward their $1 peg. The total loan repayment on March 12th was $500 million.
According to estimates by Flipside Crypto, a blockchain analytics firm, USDC debtors earned over $84 million in discounts following their loan repayments throughout the tokens’ price drop. Debtors of DAI saved approximately $20.8 million.
The prices of these stablecoins started to rally toward $1 following the announcement by the Feds that all depositors will access their funds in full.
At the time of writing, both USDC and DAI retail for $0.9990.