Traders turn to USDT as BUSD dominates the highly imbalanced Curve liquidity pool

Curve Pool’s Binance USD (BUSD) V2 pool is severely imbalanced, with crypto traders showing preferences for Tether’s USDT.

The BUSD V2 dashboard shows that the embattled stablecoin accounted for about 81% of the $12.85 million pool’s reserve, while USDT accounted for 4%. The other stablecoins in the pool – USD Coin (USDC) and DAI – make up the rest.

Crypto analysis tool Chaineye said BUSD’s dominance rose to 79.1% from 68.3% on Feb. 13 after regulators cracked down on stablecoin issuer Paxos. A research analyst at 21 Shares Tom Wan added that BUSD liquidity was down $3 million.

A look at the dashboard of 3Pool – the largest liquidity pool on Curve – shows that crypto investors favor USDT over other stablecoin options. According to the dashboard, USDT accounted for 21.47% of the reserve, USDC 38.39% and DAI 40.12% at press time.

Some analysts have raised concerns that recent regulatory action could affect USDC’s Issuer Circle. However, Markus Thielen, head of research at Matrixport, told CryptoSlate he doesn’t think regulators are directly targeting stablecoins.

Curve trading volume is increasing

Meanwhile, Curve’s trading volume surged 900% to over $1 billion amid the growing stablecoin war, according to DeFillama data.

This is one of the highest trading volumes on the protocol – behind what it recorded at the peak of FTX’s November 2022 implosion.

Curv Finance has also entered the stablecoin scene with its over-collateralized dollar-pegged digital asset crvUSD. The DeFi protocol released the white paper for the asset last year and the community awaits its release.

Curve’s CRV token grew about 14% to as high as $1.09 over the past 24 hours before falling back to its current level of $1.07 at press time, according to CryptoSlate data.

Disclaimer: The opinions of our writers are solely their own and do not reflect the opinions of CryptoSlate. None of the information you read on CryptoSlate should be construed as investment advice, nor does CryptoSlate endorse any project mentioned or linked in this article. Buying and trading cryptocurrencies should be viewed as a high-risk activity. Please perform your own due diligence before taking any action with respect to the content of this article. Finally, CryptoSlate takes no responsibility in case you lose money trading cryptocurrencies.

Learn Crypto Trading, Yield Farms, Income strategies and more at CrytoAnswers
https://nov.link/cryptoanswers