Total stablecoin supply saw its biggest drop in history during the second quarter of 2022, with stablecoin swaps surging as a result of “short-term liquidity and insolvency concerns that were not present during the panic of 2020,” according to data analytics firm Coinmetrics.

CoinMetrics head of research and development Lucas Nuzzi highlighted the data via Twitter on June 16, with a chart showing the total stablecoin supply since January 2020.

“22Q2 is the first time in stablecoin history where the total supply decreased. Even if we exclude UST, more than 10B have been redeemed *directly from the treasuries* of major issuers.”

The list included DAI, UDST, OMNI and TRON, SAI, USDK, PAX. While Circle USDC and Binance BUSD were compiled on a separate chart. UST’s original Terra variant was not included in the chart.

Nuzzi noted that Tether saw the most swaps of all centralized stablecoin issuers, with 7 billion of the total USDT supply wiped off the board in April and May, and was likely caused by the actions of a few, in place of any significant market. wide movements.

“The sharpness of that decline suggests that a single entity, or a small cohort, was behind it,” he said.

The implosion of the Terra ecosystem, including its native LUNA token and UST stablecoin in May, coincided with Tether’s USDT de-pegging from the US dollar by around 5%. As a result, around 7 billion USDT was redeemed, as the big players looked to exit the market and avoid any further potential carnage.

Another project that saw huge success was MakerDAO’s DAI, in which 40% of its supply was withdrawn as a result of the “biggest liquidation event in its history.”

USDC and BUSD were also included in a separate chart, also showing a sharp drop in supply of around 5 billion in May; however, both have since recovered and are close to returning to their respective all-time highs of around 65 billion. and 48 billion per pop.

Related: DeFi contagion fears and Celsius and 3AC insolvency rumors could weigh on NEXO price

The unique market conditions of 2022 offer a likely explanation for why stablecoin users have been taking risk off the table in recent weeks.

So far, the cryptocurrency sector has seen the Terra ecosystem cause an estimated $40 billion worth of crashes, while lending platform Celsius and venture capital firm Three Arrows Capital have also been fighting to avoid insolvency due in part to reported liquidations, exposure to Terra, falling asset prices and potentially unsustainable business models.

Tether, which is also exposed to Celsius through a $10 million equity investment in 2020 and a $1 billion loan it made to the company last year, issued a statement Monday noting that the decline in Celsius’s native token price and the firm’s liquidity issues will have “no impact” on its reserves.

The firm stated that its credit activity with Celsius “has always been overcollateralized.”

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