Ethereum benefits in fees from the turmoil that engulfed USDC last week

in #crypto6 months ago

USDC is built on Ethereum as an ERC-20 token. Here is what happened on the weekend between when the FDIC seized Silicon Valley Bank (where Circle has stored $3.3 billion in cash backing USDC) and the Monday when they announced they were bailing out all depositors:


There were a lot of requests to Circle for cash redemptions (which involved transactions sending tokens to null). There was a lot of USDC being moved from exchange to exchange by the arbitragers as it depegged and speculators tried to take advantage.

All-in-all it looks like $11 million was generated in gas fees from the mayhem that weekend.

So at least people staking Ethereum made a profit!

As an aside, the whole episode puts the value of stablecoins in doubt. In order to be a proper stablecoin, you need to back it with dollars, and hold some of those dollars in a bank. But the banks are unsafe, which is why bitcoin was invented in the first place.