SVB’s Situation Boosts DeFi Transactions

According to data analytics firm DappRadar, Silicon Valley Bank’s (SVB) status last week has greatly increased decentralized finance (DeFi) transactions.

In a new report, DappRadar states that DeFi tends to be highly sensitive to market concerns and crashes. Last weekend, USD Coin (USDC) lost confidence in the US dollar following news that $3.3 billion of the stablecoin’s issuer Circle’s $40 billion reserve was stuck in the collapsing SVB. The second-largest stablecoin by market cap dropped as low as $0.8788 on Monday. DappRadar explained that this rollercoaster has had a ripple effect on the DeFi industry. DappRadar made the following statements in its statements:

“On March 11, after the SVB collapse and USDC depegging, the DeFi market experienced a significant drop in TVL, falling 9.6% from $79.28 billion to $71.61 billion. The news caused a significant stir among investors. Fortunately, on Monday, the USDC reserve deposit held at Silicon Valley Bank was fully public, helping stabilize the market. Following this announcement, DeFi TVL rose 13%, and TVL, reached $81.15 billion.”

TVL stands for “locked aggregate value”, which represents the total capital held in a blockchain’s smart contracts. TVL is calculated by multiplying the amount of collateral locked into the network by the current value of the assets.

DappRadar states that the number of unique active wallets interacting with DeFi contracts increased from 421,026 on March 8 to 477,094 on March 11, a 13% increase. The number of transactions increased by 23% from 1,356,483 to 1,668,992. According to market intelligence platform, decentralized exchange (DEX) Uniswap (UNI) is behind this increase in activity.

“Uniswap V3, one of the most popular decentralized exchanges, saw a significant increase in the UAW, surpassing 67,000 on Saturday, March 11, with a volume of $14.4 billion, the highest recorded for V3. The 67,000 UAW was the highest number recorded in a Uniswap Dapp since summer 2021. Also, the Uniswap V3 average is $170,080, which is Saturday’s transaction size, almost double its average. This signals that Ethereum DeFi whales were quite active this past weekend.”