These couple of weeks have been a crazy ride for market behavior! 🎢 intotheblock CMCAlexandria looks at the Terra downfall in relation to the UST de-pegging event, and how this brought historic trading volumes to the Curve protocol.
Fear, uncertainty and doubt started to arise when LUNA’s market cap dropped below UST’s one. This raises the question of whether the stablecoin had sufficient backing for users who wanted to redeem their tokens. Macroeconomics tensions, plus down pressure selling of the token led to the de-peg shown on the graph above. UST’s crisis started on Saturday, May 7. Shortly after, Terraform Labs became actively involved in trying to restore with peg by burning its BTC reserves.
The death spiral situation spiked unseen on-chain trading volumes and plummeted UST’s price. Extensive selling pressure on the token triggeredvolumes on the Curve protocol, reaching $6.8 billion on Thursday, May 12, across all chains. As UST’s price reached all-time lows trading volume on Curve set new all-time highs. This was due to Curve being the market-leading DEX for stablecoins on-chain trading.The graph above displays Curve’s total volume and revenue from the Ethereum mainnet.
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