Curve 3pool liquidity down 90% YOY to $600M

Haru Invest

Curve 3pool’s liquidity at the moment stands at roughly $600 million, down roughly 90% from $5.5 billion recorded at the beginning of January 2022, in response to Kaiko data.

Curve’s 3pool dashboard exhibits that USDT accounted for 32.6% of the reserve whereas USDC accounted for 35.37%, and DAI made up 32.02%, as of press time.

3pool is the biggest liquidity pool on Curve’s decentralized trade. The pool acts as a liquidity hub for the highest three stablecoins — USDC, USDT, and DAI — utilized in decentralized finance (DeFi). In essence, the pool offers crypto merchants with probably the most capital-efficient technique of swapping between the stablecoins.

An imbalance within the pool can be utilized to find out stablecoin preferences throughout market volatility. For context, in the course of the top of Terra UST’s collapse and FTX’s chapter, crypto buyers swapped their USDT holdings for different stablecoins within the pool.

On the time, experiences revealed that USDT accounted for over 80% of the stablecoin pool.

Throughout this era, the imbalance steered an elevated desire for DAI and USDC over Tether due to fears that it’d lose its peg to the U.S. greenback. The imbalance may result in a liquidity disaster if extra merchants tried to withdraw funds in a unique stablecoin than these deposited.

In the meantime, with 3pool’s stablecoin reserve now again in stability, a researcher at Kaiko Riyad Carey said:

“Swaps of USDC for USDT have outpaced the inverse by practically $120mn this yr; $90mn distinction this weekend alone.”

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