USDC Panic: Big Mistake

The collapse of Silicon Valley Bank also badly affected the cryptocurrency market. There was an air of panic after it was revealed that some of USDC’s reserves were held in this bank.

The collapse of Silicon Valley Bank (SVB), one of the largest banks in the USA, also had significant effects on the cryptocurrency market. It turned out that part of USDC’s reserves were located in the bank that failed. A statement from Circle, the company behind the stablecoin, confirmed that $3.3 billion of the $40 billion USDC reserves are in the SVB. The loss of about 8 percent of USDC reserves caused panic, as a result of which USDC lost $1 to $0.87.

In the midst of all this, an investor made a huge mistake while trying to convert $2 million into USDT and received only $0.05 in return. As reported by smart contract developer and Solidty audit specialist BowTiedPickle, the investor in question had 3CRV worth $2,80,000. USDC wanted to sell 3CRV, which represents three stablecoins, USDT and DAI, and buy USDT. He used KyberSwap for this. The user’s transaction, which continued ignoring the slip warning, matched a pool that has not been used for 251 days and has only $2 liquidity. As a result, the $2 million 3CRV was sold for 0.05 USDC.

While this user signed an extremely unfortunate transaction, there was another user who took advantage of the opportunity on the other side and turned 1.45 dollars into 2 million dollars. This bot user received the 2 million 3CRV in the pool for 1.45 USDC and paid the validators $39k in addition to the $45 transaction fee to get priority and complete the transaction quickly. As a result, he made a profit of 2 million 45 thousand dollars.