USDT sell-off leads to slight decoupling
USDT has seen heavy selling in recent days on platforms such as Curve and Uniswap. Data shows that the USDT balance in the Curve 3 pool has soared to about 60% (normally 33%). The liquidity pool is composed of three stable coins: USDT, USDC and DAI, and USDC and DAI currently account for about 20% each.
Uniswap V3’s USDT-USDC liquidity pool, on the other hand, is one of the most liquid trading pairs on the platform, with a USDT balance of $102.3 million and a USDC balance of just $9.46 million.
According to data from CoinMarketCap, the price of USDT has been slightly decoupled since August 1 due to selling pressure, and at the time of writing, USDT was trading at $0.9991 against the US dollar.
In response to the recent price phenomenon, Tether CTO Paolo Ardoino posted on Twitter suggesting that "someone" was behind it. Paolo Ardoino said:
“USDT is coming under pressure (slightly, within 10 basis points, just to prompt market makers to react), while USDC, the main competitor you would think would profit from this situation, is being redeemed heavily. , isn’t it interesting? And the competitor who was born just two days ago magically got all this?”
Finally, Paolo Ardoino said sarcastically: "Yes! This is absolutely normal, there is no market manipulation at all." The community generally believes that Paolo Ardoino is referring to Binance and its recently supported stablecoin FDUSD.
Isn't it interesting that USDt is being pressured down (slightly, within 10bps, just to push market makers to react), and USDc, the main competitor that you would expect being gaining from the situation, is redeemed heavily nevertheless, while suddenly a competitor born 2 days…
— Paolo Ardoino (@paoloardoino) August 3, 2023
In addition, the community also uncovered a tweet posted by Binance CEO Changpeng Zhao at the end of July. However, there was no stablecoin volatility or decoupling at the time.
At the same time, Adam Cochran, a partner at Cinneamhain Ventures who had previously had issues with Binance, also discovered through on-chain transactions that some addresses that converted large amounts of USDT into DAI had funding sources from the Binance exchange, and provided evidence that These addresses are actually owned by the Binance exchange itself.
1/11The address that's mass swapping USDT -> DAI is Binance funded and has multiple addresses bulk selling USDT.It's a long chain of addresses that have been interacting with USDT over the last year.But goes back to an address funded with 1000s of ETH from Binance pic.twitter.com/wRxTwGpOSH
— Adam Cochran (adamscochran.eth) (@adamscochran) August 3, 2023
Adam Cochran said that all this is just part of Binance’s long-term plan. Eliminate the two major competitors by "selling USDT to intensify market panic" and "redeeming USDC in large quantities to reduce its market value", and hoard DAI in the process so that the same can be implemented when the planned "algorithmic stable currency" is issued in the future. attack. At the same time, as long as Binance continues to launch launch pool and transaction fee-free activities, it can increase the attractiveness of its own stablecoin. The purpose of all this is to weaken opponents in a low-cost way and monopolize the stablecoin pie.
Thinking about it, if you were a big exchange who wanted to launch your own algo stable like CZ admitted, you don’t need others to depeg… you can still attack them:1. Partner with fake sketchy offshore stables (TUSD, FDUSD)2. Give them free trading + leverage on your…
— Adam Cochran (adamscochran.eth) (@adamscochran) August 4, 2023
This article USDT’s sell-off led to a slight decoupling, and Tether CTO alluded to Binance’s interference. First appeared on Zombit.