Ever since March 9, things in the world of banking and DeFi & crypto space have been undergoing a lot of action. The weekend saw a lot of bearish action as the second-largest stablecoin by market capitalization, USDC - lost its peg from the US dollar thanks to $3.3 billion of its cash reserves being stuck with the now-defunct Silicon Valley Bank.

While the crash of the Silicon Valley Bank had its own separate impact on the world of traditional finance, banking, and the startup ecosystem in the United States, its crash also impacted the world of crypto through USDC - as many large crypto whales and institutional investors began to cash out of their USDC token amid the rising fear, uncertainty, and doubt in the market. This cashing out resulted in USDC practically losing over 10% of its peg to trade under $0.9 for a brief while over the past weekend.

However, by the end of Sunday, March 12, we saw the US regulatory authorities and various bodies led by the Federal Deposit Insurance Corporation (FDIC) springing into action to salvage what was left of the bank and ensure that all the depositors in the SVB were made whole through the deposit insurance pool. With this announcement by the US regulatory bodies, USDC managed to quickly recover its lost peg and is currently back to usual standards, trading very close to its $1 peg.

This brief depegging incident in the USDC stablecoin resulted in many of the DeFi players posting serious trading figures amid the market's chaotic situation. According to a report by Decrypt.co, trading volumes on the decentralized stablecoin exchange Curve Finance (CRV) hit $6.03 billion on March 11 due to the panic caused by the depeg of Circle’s USDC stablecoin.

The Curve Finance stablecoin pool, which is composed of Circle's USDC, Tether's USDT, and MakerDAO's DAI stablecoins accounted for nearly 80% of all trading volumes on the platform. Curve Finance DEX's liquidity providers made over $4.9 million worth of fees in the past seven days alone, a figure never seen before on the protocol.

Trading volumes on the largest decentralized exchange (DEX) by total-value-locked (TVL) in DeFi, Uniswap also soared amid USDC's brief depegging incident over the past weekend. For example, the WETH-USDC (wrapped ETH) pool saw $8.8 billion in trading volumes over the past week across nearly 100,000 traders on the platform. Other pools like USDT-USDC and DAI-USDC, hit $6 billion and $1.4 billion respectively over the same period.

Additional read: USDC Stablecoin Depeg

These high volumes on Uniswap's liquidity providers (LPs) resulted in hefty payouts to those contributing to those pools too. The two most profitable pairs on Uniswap are WETH-USDC ($4.7 million) and USDT-USDC ($2.4 million), according to a report by Decrypt.co. These volumes are nearly triple the volume of other non-USDC pools on the protocol.

However, soon by the end of March 12 and by the morning of Monday, March 13 - the crypto market overall recovered almost all of what it had lost thanks to positive announcements coming in from the US regulatory authorities, especially the one by the US Treasury Secretary Janet Yellen.

But despite USDC regaining its peg and positive developments, things seem to be going hard for it still.

Data from CoinGecko shows that the total supply of USDC dropped from $43.7 billion to as low as $35 billion on March 11. Since then, it has recovered back to $39.5 billion as of writing this article.

Values as on March 14, 2023.