Stablecoins Depeg Event Thread

Risk
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Hi all,

We wanted to let the community know that we are currently monitoring protocol-wide risk metrics for Euler given extraordinary market conditions around the USDC depeg event.

We do not recommend taking any action right now. We’ll keep monitoring the system closely and update this thread.

  • USDC and DAI are mostly affected. Those two markets constitute about 20% of total supply on Euler (~$90M). Most of positions on those markets are incentive farmers (no price movement exposure) and there are no significant (>$100k) positions close to getting liquidated right now.
  • Liquidations are still getting processed gracefully, even for smaller accounts (<$1k). No significant bad debt has accumulated so far.
  • Utilization is currently sitting at around 50% for both markets. Utilization has spiked to 83% for USDC overnight.
  • USDC reserves are sitting at $900k in case bad debt start to accumulate.

Elsewhere in the space, Gauntlet is recommending AAVE V2 and V3 markets to be paused, and Compound V2 supply on all markets is currently frozen.

We’ll keep this thread posted. Thanks!

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Although USDC and DAI are still unpegged, no bad debt has been accumulated in the last 24h.

Liquidations are still a non-issue:

  • DEX liquidity for USDC has dipped about 10% (within daily variance), DAI has stayed stable.
  • Slippage for USDC → WETH and DAI → USDC pairs are still very low (0.8% for 10M sell)

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A few small liquidations were successfully processed since we last posted.

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We’ll keep monitoring the system and we’ll be exploring the possibility of adjusting USDC and DAI collateral factor to account for this event.

Stay tuned!

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Thanks for the great work.

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Thank you for keeping the community updated @Shippooor