3 metrics provide an overview of stablecoin topography after TerraUSD (UST) crash
According to Santiment, three metrics provide an overview of stablecoin topography during and after the TerraUSD (UST) crash.
“Stablecoins have been a huge topic these past couple of weeks. Especially with the downfall of UST, and temporary downfall & subsequent redemption of $USDT, there is a ton to unravel. Learn about whales’ USDC accumulation and more in our latest writeup!”, Santiment reported.
Three metrics suggest a key trend on stablecoin following TerraUSD (UST) collapse
The Terra ecosystem collapsed earlier this month, with the LUNA dropping to zero after the UST stablecoin lost its peg. The contagion risk then spread to the stablecoin scene.
Additionally, Tether (USDT) was in heavy attention last week as it briefly lost its peg to the dollar. Then there was a huge buyback of USDT. On May 17, Paolo Ardoino, Chief Technology Officer at Tether, said the company had about 7 billion USDT exchanged into USD within 48 hours.
Tether recently announced that it had reduced the amount of commercial paper in its $74 billion stablecoin backing reserve. According to an assurance from MHA Cayman in the Cayman Islands, Tether Holdings Ltd. had assets of at least $82.4 billion as of March 31, with $82.2 billion in liabilities related to the digital tokens it generates.
The three metrics overview the stablecoin topography during and after the Terra UST crash.
According to Santiment, a flight to safety from USDT to USDC was observed with a decrease in Tether USDT market capitalization and a subsequent increase in USDC market value. According to CoinMarketCap data, Tether remains the largest stablecoin by market value at $73.19 billion, followed by USDC at $53.02 billion.
- Network growth
At the first sign of UST anchoring, retailers began converting any UST they could into USDT or USDC, the two largest stablecoins in the industry.
- Supply distribution
While network growth for USDT accelerated during the UST collapse, Santiment noted that the distribution of supply by several addresses suggests that many wallets may have stopped holding USDT altogether. The flip side of this happens to the USDC side.
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