USDC Growth Trails USDT After $285M Drift Hack, Analysts Predict Profit Pressure
After a $285 million Solana-based Drift Protocol hack and Kelp DAO exploit, USDT’s market cap rose 2.1% to $188 billion while USDC grew 1.4% to $78.25 billion, highlighting Tether’s deeper liquidity. Analysts warn DeFi outflows may reduce Circle’s interest revenue by pressuring USDC circulation and lowering gross profit.
1. Market Cap Dynamics
Following the $285 million Drift Protocol hack and a related Kelp DAO exploit, USDT’s market cap expanded 2.1% to nearly $188 billion, while USDC rose 1.4% to $78.25 billion. The disparity underscores Tether’s deeper liquidity and broader exchange integration during periods of DeFi stress.
2. Potential Revenue Impact
Analysts warn that significant DeFi withdrawals could shrink USDC’s on-chain circulation, limiting Circle’s ability to earn interest on U.S. Treasuries backing the stablecoin. Reduced on-chain holdings or shifts to yield-sharing exchanges may compress Circle’s gross profit margins and overall net interest revenue.
3. Class Action Lawsuit
Circle is facing a class action lawsuit over its refusal to freeze $285 million moved through its infrastructure after the Drift Protocol exploit. CEO Jeremy Allaire defends the choice as an ethical concern of unilateral fund freezes, while Drift has announced plans to stop supporting USDC.