Crypto traders scramble for arbitrage as Tether’s USDT strays from dollar peg

Tether’s USDT broke out of the dollar peg in the early hours of June 15, dropping to $0.9979 at the time of writing, according to Tether. of crypto slate data.

Some traders took advantage of this opportunity and profited by shorting USDT and setting up arbitrage trades.

The reason for the price discrepancy was A rare DeFi liquidity pool Especially Uniswap and Curve activity – aggressive USDT selling creates pool imbalances.

DeFi pool imbalance

curve analysis 3 poolsUSDT, the DeFi protocol’s largest liquidity pool, accounted for 73.2% of the reserves, indicating a large USDT imbalance, while USDC and DAI accounted for 26.79% of the balance at the time of writing.

Source: Curve 3 Pool

Blockchain analytics company Delphi Digital said Curve 3 pool has highest USDT concentration since November 2022.

Tether and honor redemption

Despite these concerns, Tether CTO Paolo Ardoino assured users that the issuer was “always ready” to accept redemption.he Said:

“Markets are sensitive these days, so it’s easy for attackers to capitalize on this general sentiment.

Tether’s market capitalization increased in 2023, adding more than $16 billion to a new all-time high as its main rivals struggled.

The stablecoin issuer recently announced its intention to expand into bitcoin mining and invest its profits in BTC.

However, the current uncertainty surrounding USDT has led to a net outflow of more than $200 million from its market cap early in trading hours, the paper said. of crypto slate data.

Cryptocurrency traders seek profit

Given the uncertainty, traders are making opportunistic bets on USDT. Blockchain data analysis platform Spot on Chain report or CZSamSun borrowed 31.5 million to take a short position USDT from Aave V2 and replaced with 31.8M USDC $0.9978.

On-Chain Analyst Lookonchain backed up In addition to this, CZSamSun also had other transactions involving USDT borrowing and USDC depositing, he added.

Similarly, another trader Borrowed 50 million USDC from Aave after USDT unpegged and USDT purchases started.

0x scope It pointed out Deposited by another whaling company USDC into the Abe Rent V2 and V3 USDT.he He explained that profits were made by arbitrating different interest rates between Aaves. V2 and V3 protocols.

Crypto traders contest arbitrage trading as Tether’s USDT deviates from its dollar peg first appeared on CryptoSlate.

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