The high-profile implosion of Silicon Valley Bank (SVB) last week sparked a frenzy of decentralized finance (DeFi) transactions, according to market intelligence platform DappRadar.
DappRadar notes in a new report that DeFi is highly prone to market problems and crashes.
Last weekend, USD Coin (USDC) lost its peg to the US dollar following news that Circle, the stablecoin’s issuer, had tied up $3.3 billion of its $40 billion reserves in the collapsed SVB. The second-largest stablecoin by market cap fell to a low of $0.8788 before regaining its peg on Monday.
This roller coaster had a ripple effect on the DeFi sector, explains DappRadar.
“On March 11, after the SVB crash and USDC depegging, the DeFi market experienced a significant decline in its TVL, with a 9.6% drop from $79.28 billion to $71.61 billion. The news caused panic among investors, leading to a major sell-off and a fall in the TVL.
Fortunately, on Monday the 13th, the USDC reserve deposit at Silicon Valley Bank was fully available to the public, helping to stabilize the market. This announcement led to a 13% spike in DeFi TVL, reaching $81.15 billion.
TVL stands for “total value locked”, which represents the total capital held in a blockchain’s smart contracts. TVL is calculated by multiplying the amount of collateral locked into the network by the current value of the assets.
DappRadar notes that the number of unique active wallets interacting with DeFi contracts increased from 421,026 on March 8 to 477,094 on March 11, a 13% increase. The number of transactions increased by 23% from 1,356,483 to 1,668,992.
According to the market information platform, the decentralized exchange (DEX) Uniswap (UNI) was behind that increase in activity.
“Uniswap V3, one of the most popular decentralized exchanges, saw a significant increase in UAW, surpassing 67,000 as of Saturday, March 11, with a volume of $14.4 billion, the highest figure ever recorded for V3. The 67,000 UAW was the highest recorded on a Uniswap Dapp since the summer of 2021.
In addition, Uniswap V3 has avg. transaction size on Saturday was $170,080, almost double the average, indicating that Ethereum DeFi whales were very active over the weekend.
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