Tether’s stablecoin, USDT, has experienced a slight deviation from its peg as Curve’s 3Pool, a prominent pool for stablecoin trading in the decentralized finance (DeFi) space, has become significantly imbalanced.

Under normal circumstances, the balance of the Curve 3Pool should be evenly distributed at 33.33% for each of its three stablecoins — USDT, USDC, and DAI. However, USDT’s balance has escalated to over 70%. This suggests that traders are extensively selling USDT for DAI or USDC, leading to USDT’s de-pegging to $0.99.

Tether CTO: ‘Market is Highly Tense’

“The market is highly tense at the moment,” Tether CTO Paolo Ardoino told The Block.

“All the recent news and events are prompting large groups to exit from crypto markets. Tether acts as a liquidity gateway, managing both inflows and outflows. So, when interest in crypto heightens, we see inflows; when the sentiment on the crypto market turns negative, we see outflows. We can’t dismiss a direct attack on Tether either, as we have seen in 2022,” Ardoino added.

The last time Curve 3Pool experienced an imbalance was in March when the balance of USDC and DAI each increased to over 45%. It also became imbalanced in November when the FTX crypto exchange collapsed. A similar imbalance was also observed after the crash of the Terra ecosystem in May 2022, which led to USDT becoming volatile and temporarily losing its peg.

Ardoino stated that Tether is keeping a close eye on the situation and is “ready to redeem any amount.”