Curve pool imbalance triggers USDT depeg concerns: Finance Redefined
Welcome to Finance Redefined, your weekly dose of essential decentralized finance (DeFi) insights — a newsletter crafted to bring you the most significant developments from the past week.
On June 15, an imbalance in Curve Finance’s 3pool led to a Tether (USDT) depeg scare as the stablecoin’s weightage in the pool rose above 70%, leading to heavy selling. Tether’s chief technology officer claimed these market conditions are stress tests for the stablecoin and played down the depeg “FUD.”
In other news, a crypto trading bot programmed to execute arbitrage trades borrowed $200 million to make just over $3 in profit.
Uniswap, the decentralized exchange protocol, released its version 4 code on June 13, making way for new liquidity pools.
DeFi lending platform Sturdy Finance was drained for $800,000. The protocol’s team offered a $100,000 bounty for returning the funds and reopened its stablecoin market on June 16. In another exploit, the Hashflow protocol was drained for $600,000; however, Hashflow assured users they would be “made whole.”
The top 100 DeFi tokens had another bearish week, with most of the crypto tokens trading at three-month lows.
USDT slightly deviated from its United States dollar peg on June 15 due to an imbalance in Curve’s 3pool. The price of USDT fell by 0.3% to around 0.997 as its weightage in the curve 3pool increased to over 70% from the usual 33.1%.
Curve’s 3pool is a stablecoin pool for decentralized finance holding a massive amount of liquidity in the three top stablecoins: USDT, USD Coin (USDC) and Dai (DAI). A significant rise in the weightage of a particular stablecoin in the pool indicates heavy selling of that asset.
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A crypto trading bot programmed to perform arbitrage trades
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