Algorithmic “stablecoins” DAI and FRAX have lost their peg to the US dollar amid similar troubles facing the stablecoin USDC after the collapse of Silicon Valley Bank (SVB).
DAI and FRAX rank fourth and sixth in CoinGecko’s stablecoins by market capitalization at $5.1 billion and $946 million respectively.
As of this writing, the DAI trades at $0.92, FRAX at $0.96.
The share of USDC in collateral backing the issued DAI exceeds 54%, according to DaiStats.
Previously, USDC lost its peg to the US dollar after Circle announced it was holding $3.3 billion in reserves at SVB. It was closed by the California Department of Financial Protection and Innovation due to “lack of liquidity and insolvency.”
In February, the Frax Finance community decided to gradually transition FRAX from algorithmic backing to full reserve backing.