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Tether concerns are arising again as whales have recently initiated a dumping spree of USDT, causing it to account for more than 73% of the Curve 3pool. This surge in inflows is highly abnormal and has raised suspicions of either increased fear, uncertainty, and doubt (FUD) or insider knowledge.
Tether concerns are arising again.
— Miles Deutscher (@milesdeutscher) June 15, 2023
Whales have been dumping $USDT, resulting in USDT now comprising 50%+ of the Curve 3pool.
The sudden spike in inflows is very abnormal.
Either more FUD, or somebody knows something.
Will keep updating this thread (metrics below).👇
Tether’s USDT, the dominant stablecoin with an impressive market capitalization of $83 billion, experienced a slight de-pegging from its usual 1:1 ratio with the US dollar on the Curve DEX. This unexpected event presented a unique opportunity for quick DeFi traders to engage in arbitrage.
Promptly responding to the de-peg, market participants capitalized on the opportunity by significantly increasing their borrowing of USDT from Aave. Borrowers opted to sell the devalued USDT for DAI or USDC, both of which maintained their usual 1:1 peg with the US dollar.
An intriguing case worth mentioning involves an Ethereum address identified as czsamsun.eth, which utilized 17,400 ETH ($28 million) and 14,690 stETH ($24 million) as collateral to borrow $31.5 million USDT from Aave 2. They subsequently exchanged the borrowed USDT for 31.47 million USDC at a rate of $0.997 on Curve.
czsamsun.eth borrowed 31.5 million USDT from Aave V2 by using 17,000 ETH and 14,000 stETH as collateral, then exchanged all the borrowed USDT into USDC on 1inch. Afterwards, the borrower deposited 10 million USDC and 21 million USDC to V2 and V3 respectively. Then, the borrower…
— Wu Blockchain (@WuBlockchain) June 15, 2023
The sudden de-pegging of USDT from the USD provided a distinctive opportunity for these traders to engage in arbitrage, taking advantage of the price discrepancies between markets. In this particular instance, the discrepancy lay between the reduced trading price of USDT and its customary parity with the US dollar.
Following the this tensed situation, Tether CTO Paolo Ardoino released a statement. Ardoino acknowledged the potential for attackers to take advantage of the prevailing general sentiment. However, Ardoino assures that Tether is fully prepared to withstand any potential threats. He confidently states, “Let them come. We’re ready to redeem any amount.” The commitment to redeem any quantity reflects Tether’s readiness to navigate market volatility and maintain stability.
According to CoinMarketCap data, USDT has dipped by 0.10% and is trading at $0.9966 at press time, with the price changing up and down rapidly.