The USDC stablecoin, the second largest in the market, has recently detached from its peg to the actual value of the U.S. dollar. This event has caused many individuals and businesses who borrowed money in USD to repay their loans sooner, saving more than $100 million in the process.
The value of two of the most popular stablecoins, USDC and DAI, plummeted over the weekend, hitting their lowest points in months. However, both coins have since recovered, with Circle co-founder Jeremy Allaire assuring that USDC’s reserves are safe.
The recent de-pegging of DAI and USDC from USD has caused a large number of borrowers to repay their loans at a discount, resulting in over $2 billion in loan amount repaid on Aave and Compound, a decentralized crypto landing platform.
More than $1 billion of loans were settled in USDC and about $500 million in DAI on Saturday. However, the volatile USDC and DAI have so far recovered.
Flipside Crypto and another analytics firm, both published reports on the estimated saved money by debtors. USDC borrowers saved around $84 million amid de-pegging, and DAI borrowers received discounts during the widespread crypto unrest. “Overall, DeFi markets experienced two days of huge price dislocations that generated countless arbitrage opportunities across the ecosystem, and highlighted the importance of USDC,” the Kaiko report said.