Three Arrows, a commercial finance company, switched to Lido Staked Ethereum (stETH) worth $ 33 million Ethereum on the DeFi platform Curve on June 14.
This move comes as stETH prices in secondary markets differ significantly from the value of ETH, which puts pressure on traders who use DeFi token as collateral.
Since last week, Three Arrows has become the second owner of stETH to dump a coin. Last Monday, crypto retailer Alameda Research exchanged its entire ETH holding token, valued at $ 1.5 billion. That trade, which also takes place in the Curve, is likely to blame the split between stETH and ETH.
DeFi coin currently trades at $ 1,103.15, as well as $ 1,173.96 for Ethereum.
Will Three Arrow Capital dump more stETH?
According to crypto analyst @mhonkasalo, while the $33 million exchange represents a significant portion of Three Arrows’ STETH holdings, the company still has an estimated $22 million in one of its portfolios.
The Three Arrows have been releasing stETH every month, according to on-chain figures. Venture capital company now appears to be putting the ETH it has acquired from AAVE and Lido lending pools.
However, in line with Alameda, their variability has caused a great deal of inequality in Curve’s STETH lake.
The token currently makes up about 80% of the pool, which puts some lower pressure on prices.
Effects of stETH on crypto market:
stETH has a small impact on ETH prices or the large market alone. The token can still be used with a single ETH when the merger is live, even if its price falls in the secondary market.
However, the uncertainty of the token triggers a panic attack on ETH and other cryptocurrencies. Worse, its use as collateral by key crypto lending centres, namely Celsius, threatens to liquidate billions of dollars’ worth of assets.
Read more: Skybridge Capital CEO stays bullish over Bitcoin and Ethereum amid current crypto bloodbath
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