The decentralized finance (DeFi) sector has seen tremendous growth over the past couple of years, and this was further demonstrated over the weekend when USDC witnessed a significant trading volume on several decentralized exchanges. Uniswap, for example, reached its highest daily volume ever of $11.84 billion on March 11th, while Curve Finance recorded its biggest daily trading volume of nearly $8 billion. SushiSwap also experienced a surge in activity and went on to become one of the most used smart contracts by top Ethereum whales.
The development comes in the backdrop of Circle’s USDC de-pegging event that occurred over the weekend after the collapse of Signature, Silvergate, and Silicon Valley Bank. Several centralized crypto exchanges, including Binance, Coinbase, Crypto.com, and Bitpay, halted payments and auto conversions in the stablecoin. This caused the stablecoin prices to fluctuate wildly, and gas fees soared as investors rushed to decentralized entities to exchange USDC for wrapped ether and other tokens.
The increased activity in the DeFi sector is a result of the declining faith in centralized institutions following last year’s back-to-back collapses. A recent report by CoinGecko suggested that funding for centralized projects appears to have reached saturation point as DeFi projects saw increased funding even as the market shifted from bull to bear. This demonstrates that decentralized entities are becoming increasingly popular, and that investors are turning to DeFi during major collapses.