Stablecoin USDC Becomes Unstable; v2 Disables Transactions
Stablecoin USDC: Binance Temporarily Halts Withdrawals
The world’s largest cryptocurrency exchange, Binance, paused withdrawals of the stablecoin USDC while it carried out a “token swap.” This move is part of an effort to protect investors from volatile, unstable markets and comes shortly after Quantitative Crypto Insight reported that USDC has become increasingly unstable in recent weeks.
Stablecoin USDC Interest Rates Drop Amid Volatility
The volatility of USDC has caused interest rates associated with lending USDC to drop significantly. According to the latest report from Quantitative Crypto Insight, the average yield for lending USDC on Compound Finance has dropped from 7.5% to 4.9%. This trend will likely continue as more investors move away from USDC due to instability.
Compound v2 Pause Guardian Takes Precautionary Measures.
In response to the volatility of USDC, Compound v2 Pause Guardian has temporarily disabled USDC supply transactions in Compound v2. While users can still borrow, repay, and withdraw USDC usually, the Compound v2 Pause Guardian is taking precautionary steps to protect investors in light of USDC’s instability.
Despite its recent volatility, USDC remains one of the most popular tokens on the Compound. According to Quantitative Crypto Insight’s report, USDC accounted for more than 25% of the total value locked in the protocol.
As the USDC market stabilizes in the coming years, investors can expect to see higher interest rates associated with lending USDC in 2023. According to the latest report from Quantitative Crypto Insight, the average yield for lending USDC on Compound Finance could reach 8.5% in 2023.
The Compound v2 Pause Guardian has temporarily disabled USDC supply transactions due to its recent volatility. Users can still borrow, repay, and withdraw USDC usually; however, despite this, USDC holders can still earn interest on their USDC tokens through lending them on various platforms such as Nexo and Compound. USDC has a circulating supply of 41.95 B USDC and is -0.02% in the last 24 hours.
