Stablecoins Face $892M Outflow Following KelpDAO Incident
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A Senior Altcoin Analyst, Sarah combines on-chain data with a background in venture capital research. With a Master’s in Computer Science, she provides precise evaluations…
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The recent breach affecting KelpDAO has sent shockwaves through the stablecoin market, resulting in an outflow of approximately $892 million. Despite this steep decline, the market still maintains a significant valuation of $320.65 billion, with Tether’s USDT holding a dominant position, making up 59.19% of the total market share.
The KelpDAO incident has caused a notable reduction in the total value locked (TVL) within decentralized finance (DeFi) platforms, which has diminished sharply over the past week. Numerous DeFi protocols, including Aave, experienced a rush of users unwinding their positions, with many opting for stablecoin exits as they sought to minimize risk during this turbulent period.
The outflow trend coincided with a reported contraction of $892 million in stablecoin metrics, as observed on defillama.com. Tether’s USDT continues to show resilience, registering a market cap of $189.78 billion. This figure represents a slight improvement of 1.55% over the last week, equating to an increase of roughly $2.89 billion, further solidifying USDT’s leading role in the market.
In contrast, Circle’s USDC faced challenges, seeing a decrease of 1.01%, which translates to a loss of approximately $794 million from April 19 to April 26. Meanwhile, Sky’s USDS, which is a rebranded entity once known as MakerDAO, has fallen to a market cap of $8.27 billion, reflecting a 1.89% decline.
During the same timeframe, USDS lost close to $159 million, while another stablecoin, DAI, managed to maintain stability with a market cap of $4.67 billion and a weekly gain of 1.55%. The top five stablecoins are rounded out by World Liberty Financial’s USD1, which has shown a remarkable weekly increase of 4.34%, bringing its market cap to $4.39 billion.
Ethena’s USDe has taken a substantial hit, leading the outflows with a staggering 34.39% decline, now valued at $3.82 billion. This drop is a direct result of the complications stemming from the KelpDAO breach, with USDe shedding over $2 billion in value. Paypal’s PYUSD also faced significant contraction, decreasing by 16.06% to a market cap of $3.445 billion.
Moreover, USDG recorded a decrease of 5.71%, with a valuation now at $1.114 billion, while FDUSD saw a more modest drop of 1.46%, settling at $2.34 billion. Other stablecoins like FRAX and GUSD also experienced declines over the past week.
The current data indicates that the market is grappling with the shock of this incident rather than quickly recovering. While capital isn’t flowing out indiscriminately, it is shifting towards more established issuers, leaving weaker structures to face sharper declines. The return to stability in the market will depend largely on the rebuilding of confidence in the underlying mechanisms of DeFi in the weeks to come.
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