The Terra ecosystem collapsed earlier this month, with the LUNA token turning zero after the UST stablecoin lost its peg. The risk of infection later spread to the stablecoin landscape.
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Furthermore, Tether (USDT) came under an intense spotlight last week as it lost its peg with the dollar. This was followed by a major redemption of USDT. on 17th May, paolo ardoinoTether’s chief technology officer said the firm had redeemed approximately $7 billion USDT for USD within 48 hours.
Tether recently announced that it has reduced the amount of commercial paper in reserves while backing its $74 billion stablecoin. According to an assurance from MHA Cayman in the Cayman Islands, Tether Holdings Limited had assets of at least $82.4 billion as of March 31, with $82.2 billion in liabilities related to the digital token.
On-chain analytics firm Sentiment provides three metrics that provide an overview of stablecoin topography during and after the Terra UST crash.
transactions
According to Sentiment, the flight of security from USDT to USDC was seen in a decline in Tether’s USDT market cap and a subsequent rise in USDC’s market cap. According to data from CoinMarketCap, Tether remains the largest stablecoin by market cap at $74.14 billion, followed by USDC at $52.80.
network growth
At the first sign of UST de-pegging, retailers began to convert USDT to USDT or USDC, the two largest stablecoins in the industry.
supply distribution
While network growth for USDT accelerated during the US collapse, Santiment notes that the supply distribution by multiple addresses suggests that a lot of wallets may have stopped holding USDT altogether. The opposite happened on the USDC side.