This week’s on-chain data report from analytics firm Glassnode looks at three key events: USDC stablecoin de-pegging, net capital outflows, and futures open interest data.
This has left USDC and DAI trading as low as $0.88 and $0.89 respectively. The drop in DAI is due to stablecoin collateral backing around 65.7%. Gemini’s GUSD and Paxos’ USDP also fell below the $1 peg, while BUSD and Tether traded at a premium.
Notably, Tether traded at a premium between $1.01 and $1.03 over the weekend. This is ironic as it is seen as a safe haven in the face of potential risks in the heavily regulated US banking sector. This is the first time there has been price volatility in a stablecoin since the collapse of the LUNA-UST project.
DAI/USDC
Stablecoins, especially USDC, have become the primary form of collateral to support DAI. This trend has been consistent since mid-2020, with USDC accounting for c.55.5% of direct collateral and a significant portion of Uniswap’s liquidity position, which collectively represents c.63% of all collateral.
According to Glassnode data, relying on stablecoins as collateral raises questions about the decentralized nature of DAI. This recent event highlights how DAI’s price is closely tied to the traditional banking system, with a collateral mix that also includes his 12.4% of tokenized real-world assets.
Tether USDT Dominance
In mid-2022, Glassnode reported that Tether’s dominant position in the stablecoin market has declined structurally since mid-2020. However, regulatory action against BUSD and concerns about USDC resulting from the recent de-pegging have pushed Tether’s dominance back to over 57.8%, the highest level in 18 months.
Since October 2022, USDC has maintained a dominant market share of 30% to 33%. However, it remains to be seen if that supply will decrease as the redemption period resumes on March 20th. Meanwhile, BUSD has experienced a significant drop in recent months, with issuer Paxos halting new issuance and its dominance down from his 16.6%. to just 6.8% now in November.
total capital outflow
Last month, the market experienced a reverse outflow of -$5.97bn, 80% of which was the result of stablecoin redemptions (mostly BUSD), according to estimates from Glassnode, an estimate of true capital inflows and outflows. , 20% due to overall realized losses. BTC and ETH.
SVB drops in percentage of BTC and ETH on exchanges
About 0.144% of all BTC in circulation and 0.325% of all ETH in circulation have been withdrawn from foreign exchange reserves, showing a self-managing reaction pattern similar to the FTX collapse. In US dollar terms, more than $1.8 billion in combined BTC and ETH values fled exchanges last month.
