USDC Investor Spends $2M to receive $0.05 USDT trying to Attempt to Avoid Crash
The crypto market responded with a massive sale of not all USDC investors who were lucky enough to walk away with their funds amid the uncertainty.
According to Circle Silicon, Valley Bank did not transfer $3.3 billion of its USD coin reserves the market responded with a massive sell-off depending on the stablecoin from the U.S. dollar.
Investors started selling their USDC tokens in exchange for other stablecoins. like Tether. BowTiedPickle a Twitter user indicate a USDC investor paid over $2 million to receive $0.05 of USDT.
With USDC insolvency fears rampant, users are fleeing to safety in other stables. Not all of them are going to make it there in one piece, however.— BowTiedPickle.eth | Solidity Shipper (@BowTiedPickle) March 11, 2023
Here's how one unlucky user paid $2,080,468.85 to receive $0.05 of USDT. pic.twitter.com/R8YdudWfsV
On-chain investigations revealed that the user had stored the assets in a liquidity pool a popular method to earn passive income in cryptocurrencies the user could have sold his LP tokens for USDT for a 6% slippage.
BowTiedPickle explained they chose to go for a questionnaire:
"The unfortunate soul used the KyberSwap aggregation router to dump a large clip of 3CRV (DAI/USDC/USDT)" LP token into USDT."
The USDC investor forgot to set his slippage which allows investors to set an exact price of the token for the transaction to go through. he also explains the nuances that eventually led to a maximal extractable value (MEV) bot netting $2.045 million in profit after paying $45 in gas and $39,000 in MEV bribes.
The above episode highlights how human error can result in a permanent loss of funds while cashing out USDC for fiat or other cryptocurrencies.
After Circle confirmed that $3.3 billion was stuck with Silicon Valley bank a resultant sell-off of USDC caused the stablecoin's value to drop below its $1 peg.
The live USD Coin price today is $0.911100 USD with a 24-hour trading volume of $22,035,455,403 USD.
1/ Following the confirmation at the end of today that the wires initiated on Thursday to remove balances were not yet processed, $3.3 billion of the ~$40 billion of USDC reserves remain at SVB.— Circle (@circle) March 11, 2023
USD Coin is down 8.88% in the last 24 hours. The current CoinMarketCap ranking is #5, with a live market cap of $37,303,535,626 USD. It has a circulating supply of 40,943,404,265 USDC coins