Some debtors seem to have used the drop in USDC and DAI prices to their advantage.
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.