DUE TO BANK SHUTDOWNS? Highest Volume of Token Swaps Recorded on MetaMask For Past Week

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Editing and Additional Reporting by Nathaniel Cajuday

  • MetaMask Swap, a MetaMask feature that allows users to swap tokens at the lowest network fees possible, has experienced a surge in token swaps in terms of volumes. 
  • According to the platform’s group manager, Dan Finlay, the surge may have been due to the collapse of US fiat banks Silvergate Capital and Silicon Valley Bank on March 8 and 10, respectively. 
  • As per the data from DappRadar, the spike lasted for at least six days, from March 9 to 14. The volume of token swaps for the past seven weeks ballooned to 145.78%. 

The recently recorded spike in token swaps on web3 wallet provider MetaMask over the past several days may have been due to the collapse of US fiat banks Silvergate Capital and Silicon Valley Bank last week, Metamask Group Manager Dan Finlay emphasized. 

“It’s a lot of just speculative panic. People aren’t sure what they can trust, and everybody seems to want something stable… [People] making some pretty big moves in response to this situation,” Finlay added.

MetaMask Swaps in Past Seven Days

For the past seven days, MetaMask Swap experienced a volume of $69.74 million, an increase of 145.78%. The number of transactions also ballooned by 22.61%, which is about 63,000 transactions.

According to DappRadar’s data, the spike was first recorded on March 9, 2023, a day after Silvergate announced that it was winding down its operations. With a recorded volume of $9.67 million, it tallied an increase of about 120% for just 24 hours. 

Almost a similar volume was recorded on March 10, when Silicon Valley collapsed. The recorded volume for that day was $9.67 million.

While the peak of the swaps spike was recorded on Monday, March 13, with $13.8 million. It ‌continued until March 12’s $12.96 million volume recorded. 

As of March 15, the volume of swaps in MetaMask Swaps seems to have returned to normal levels, at $6.24 million. 

What is MetaMask Swap?

Launched in late 2020, Metamask Swap allows users to directly swap tokens from their desktop or mobile wallet by combining data from decentralized exchange aggregators, market makers, and DEXs, which enables users to get the lowest network fees.

“People are onboarding, people are fleeing to crypto in many situations. We see that every time there’s one of these systemic shocks, people kind of look at it again and they’re like ‘hey, wait, that’s holding up,’” Finlay concluded, guessing that the current crisis in the finance industry is the main reason why users are swapping their tokens to other tokens. 

What happened in recent weeks in crypto?

The crypto-friendly bank Silvergate Capital recently “voluntarily liquidated” its assets and wound down operations due to the still-ongoing bear market and meltdowns in the crypto industry. Despite this, the bank assured that it will do a “full repayment of all deposits” to its customers. 

On the other hand, tech lender SVB suffered a 48-hour capital crisis that led to the second-largest failure of a financial institution in the United States. Following this, the U.S. Justice Department and the Securities and Exchange Commission (U.S. SEC) are both set to investigate the incident. 

Consequently, fiat-backed stablecoins are also shaken by the recent meltdowns, specifically when Circle, the issuer of USDC, the second-largest stablecoin with a market cap, revealed that it had $3.3 billion in reserves kept by the SVB. 

Last January, Consensys, the firm behind the wallet, launched MetaMask Staking, which allows users to stake their ETH inside MetaMask; they will be connected to Lido or Rocket Pool, two popular staking options, in return for tokens from these providers. 

This article is published on BitPinas:  DUE TO BANK SHUTDOWNS? Highest Volume of Token Swaps Recorded on MetaMask For Past Week

Disclaimer: BitPinas articles and its external content are not financial advice. The team serves to deliver independent, unbiased news to provide information for Philippine-crypto and beyond.

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Shiela Bertillo

    BitPinas is the leading and most trusted blockchain and cryptocurrency news outlet that covers the Philippine blockchain and crypto scene. We are also writing general and international blockchain topics that are relevant to our audience.