A DeFi trader has reportedly swapped 2 million USDC tokens to USDT, only to end up with a measly 0.05 USDT in return. The incident occurred on March 11, during the height of the recent market turmoil.
According to reports, the trader made the swap via a series of transactions, starting with the conversion of 3Crv to USDC before exchanging the USDC for USDT. However, the trader’s transactions were reportedly detected and front-run by MEV (Maximal Extractable Value) bots on the Ethereum network, resulting in a loss of approximately $1.45 USD in gas fees.
The incident highlights the ongoing risks associated with decentralized finance (DeFi) trading, particularly in light of the growing prevalence of MEV attacks. MEV refers to the value that can be extracted by miners or bots through reordering transactions, front-running trades, and other similar tactics. As the DeFi market continues to grow, so too does the potential for MEV attacks, leaving investors vulnerable to significant losses.
This news comes as Circle, the issuer of the USDC stablecoin, has revealed that $3.3 billion worth of USDC reserves remain at Silicon Valley Bank, amid concerns over the bank’s solvency. While Circle has assured investors that their USDC holdings remain secure and that the company has implemented additional safeguards to protect against potential risks, the news has raised questions about the stability of stablecoins and their underlying reserves.
As the DeFi market continues to evolve and grow, it’s important for investors to be aware of the risks involved in trading these assets. While decentralized finance offers a promising new frontier for investing and financial innovation, it also comes with unique risks and challenges that must be carefully considered. As always, investors should exercise caution and conduct thorough research before investing in any DeFi assets.
Read more:
- BlockFi’s Uninsured Funds Worth $227 Million Allocated To Silicon Valley Bank’s Money Market Mutual Fund (MMMF)
- Silicon Valley Bank Shuttered By California Regulator Over Liquidity And Insolvency Concerns
- Circle Concerned Over USDC Reserves At Silicon Valley Bank
- Binance Halts Auto-Conversion Of USDC To BUSD Amid Market Turmoil