Three Arrows Capital “sell off” stETH to ETH
The situation of stETH deviating from ETH continues to have the latest progress with the massive “discharge” of the Three Arrows Capital fund.
The panic mentality became more widespread on the morning of June 13 when the lending platform Celsius blocked deposits, withdrawals, and transactions when there was insufficient liquidity to meet users’ needs. Celsius is holding a massive amount of stETH and may be “under attack,” forcing them to liquidate the loan orders on Compound, Aave, and Maker, having to sell this stETH. But, on June 13, Celsius still deposited 23,962 more WBTC to borrow 278 million DAI, with Bitcoin’s liquidated price of $16,800.
Since then, ETH prices have been drastically dumped and lost more than 40% of their value, collapsing from the $1,800 mark on June 10 to the 2022 bottom at $1,075 on June 14. This is also the lowest value threshold of Ethereum since January 2021, followed by a series of 1 week of continuous decline of the second-largest cryptocurrency in the world.
By the afternoon of June 14, the exchange rate of stETH and ETH on Curve continued to fall to 0.93, but it was not possible to find a balance.
The above fluctuation comes from Three Arrows Capital (3AC) fund discharging stETH warehouse and swapping for ETH. According to blockchain data, in the past hours, 3AC wallets have sold more than 30,000 stETHs (worth more than $33.7 million). Much of this goes to ETH, while the rest goes to about $20 million stablecoin DAI.
Even so, 3AC’s wallet now still has more than 19,600 stETHs, worth more than $21.8 million.
In addition, the crypto community on Twitter is spreading rumors that Three Arrows Capital is experiencing liquidity difficulties after the market has constantly been dumping heavily over the past, as well as the joint effect from the LUNA-UST crash in early May. However, this information has not been verified.
Three Arrows Capital is one of the funds that invests “hard” in the Terra ecosystem, even more times “strong shillings” for LUNA-UST just before the crash. The foundation’s CEO, Zhu Su, apologized to the community for his statements.
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