Tether lost its 1:1 peg to the US Dollar as traders swapped millions of USDT tokens for other stablecoins on Curve 3Pool.
Curve’s 3Pool is a popular liquidity pool on Ethereum (ETH) that provides stablecoin swapping facilities for Tether (USDT), USD Coin (USDC), and Dai (DAI). Under normal circumstances, Curve 3Pool’s currency reserves hover at 33% for each of the three stablecoins.
However, the currency reserves on Curve 3Pool have become unbalanced, with the pool’s USDT reserves surging to $300M. The sudden spike in Curve 3Pool’s Tether reserves indicates that several users have converted their USDT holdings into USDC and DAI tokens.
As a result, USDT’s price fell below the $1 mark. The stablecoins’ value remains at $0.997 at the time of writing.
In response, Tether CTO Paolo Ardoino said the huge USDT outflows are the result of negative market sentiments. He assured the crypto community that Tether will continue to process redemptions.
Referring to the collapse of TerraUSD (UST) in 2022 that lead to a significant downturn in the crypto market, Ardoino acknowledged that a direct attack on Tether is also plausible, adding,
“Markets are edgy these days, so it's easy for attackers to capitalize on this general sentiment. But at Tether we're ready as always. Let them come.”
Written by
Ayush Pande
Ayush Pande is a hardware, gaming, and crypto writer based in India. He's a tech enthusiast who's fascinated by the potential of blockchain technology.
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