One Depositor Pulled 15% of a US$4.5 Billion Stablecoin Savings Pool in a Day

Dollar stablecoins that pay interest have become crypto's version of a money-market account, and they are learning the money-market lesson: large deposits can move in a day. On November 6, USDS, the US$5 billion dollar token of the Sky protocol, shrank by US$893.24 million, 13.79 percent, in a single day. A single depositor's exit equals three-quarters of that: it took US$675.83 million out of Sky's savings pool and lent it on Aave, a rival lending market. Sky did not change its rate. It paid the exit from the USDC held in its swap facility.

Sky is the protocol formerly known as MakerDAO, issuer of DAI, one of the oldest decentralized dollar tokens. USDS is its newer dollar, and seven in ten USDS sit in sUSDS, a savings pool that pays a rate set by Sky's governance, currently 3.80 percent. Holders who want ordinary dollars out can swap USDS for USDC, the stablecoin issued by Circle, through a conversion facility Sky keeps stocked with USDC for that purpose. That facility works like a bank's cash drawer: it is what lets depositors exchange USDS for USDC on demand.

The contraction was reported by The Defiant on November 8, which found USDS supply down 13.4 percent in a week and Sky's total value locked down about 15 percent, but could not say how much came from withdrawals. The transaction records answer that: most of it was one withdrawal, converted to USDC and redeployed within crypto lending. The money did not leave the crypto market. It changed venue.

One depositor moved 15% of the savings pool in a day

At the November 5 close, one address held US$675.83 million in Sky's savings pool, 14.96 percent of the US$4.52 billion on deposit. On November 6 it withdrew the full balance in three transactions, exchanged the US$675.87 million for USDC through Sky's conversion facility, and deposited it in the USDC market of Aave, a crypto lending protocol where depositors earn interest from borrowers. By the November 6 close it held no USDS and US$675.89 million on Aave. The depositor is not publicly identified; the address was first funded from a Binance wallet. The records show the move, not the motive.

The rates are a matter of record, and one of them moves by the minute. Sky's savings rate was 3.80 percent on every day from October 13 to November 9. Aave's USDC rate was 5.82 percent at 15:47 UTC on November 6, minutes before the deposit; by 16:27 UTC it had fallen to 2.38 percent, below Sky's, and it closed the day at 3.21 percent. The rest of the day's activity was broad but ordinary: 140 addresses exchanged US$1.16 billion of USDS for USDC on November 6, against an average of US$210.2 million a day over the previous nine days, and the pool's other depositors added about US$104 million. Sky's own investment contracts issued and retired near-equal amounts that day and did not drive the decline.

Sky's swap facility absorbed the exit

Sky paid the exit from its USDC reserve, which fell from US$3.44 billion to US$2.87 billion on November 6, a drawdown of 16.57 percent in a day. Since October 13 the reserve has fallen 28.72 percent, to US$2.96 billion at the November 9 close. Because DAI and USDS convert into each other one-for-one, the same reserve stands behind both tokens; it now equals 30.01 percent of their combined US$9.87 billion.

USDS is also shrinking faster than the market around it. Measured at the same points on Ethereum, it fell 22.42 percent from October 13 to November 9, while circulating USDT fell 7.15 percent and USDC 4.60 percent. USDT and USDC also fell over the window, while RLUSD and USDe grew. The records show one depositor's move, not the reason for it. How dollar tokens differ in what backs them is set out in the reserves analysis of the new stablecoin rulebook.

Why it matters: a few accounts can move a rate-paying dollar

US law now bars issuers of regulated payment stablecoins from paying holders interest, and the question of who else may offer yield on stablecoins is an open policy debate. Yield has instead been offered through products built around stablecoins: savings pools like sUSDS and lending markets like Aave. November 6 shows what competition between them looks like. In this case one address held 14.96 percent of Sky's savings pool and moved all of it within the day, the kind of concentration bank supervisors watch in large uninsured deposits. Aave's rate fell as the money arrived. Sky paid the exit from its swap facility's USDC.

For anyone holding a rate-paying stablecoin, accepting one as collateral or supervising the market, the useful numbers are not the headline supply but how much of it sits with a handful of large depositors and how much cash stands ready to pay them. Sky met a 15-percent exit from its savings pool in one day; the swap facility's USDC now equals 30.01 percent of USDS and DAI. Whether issuers respond by raising rates, holding more cash, or accepting that their size will rise and fall with a few large accounts is the question the next weeks of supply data will answer.