Statement on the USDC depeg incident

Published in
3 min readMar 14


As USDC is the stablecoin that the Bumper protocol is slated to open with at launch, and considering our new USDC-BUMP pool and liquidity mining program is currently operational, we felt it was important to make a statement on the events over the last weekend.

On Saturday 11 March, USD Coin (USDC) depegged from the dollar following the collapse of Silicon Valley Bank (SVB) the previous day. The depeg appears to have occurred because issuer Circle had significant deposits in the bank, totalling $3.3B.

Although USDC can trade any second of every day, liquidity operations with banks are limited to the institution's normal opening times, and there was little chance of this being resolved until the opening of normal trading operations on Monday morning.

Happily, within hours of reopening USDC had recovered back its peg, partly as a result of the FDIC’s agreement to secure deposits, but also thanks to Circle’s immediate response to the issue.

From the outset, Circle have always stated their obligation and commitment to back-stop its stablecoin, and they have followed through, making this weekend’s events simply an arbitrage opportunity for those who’ve filled the gap.

“In such a case, Circle, as required by law under stored-value money transmission regulation, will stand behind USDC and cover any shortfall using corporate resources, involving external capital if necessary.”
Statement from Circle 12/3/23

Happily, on March 13th, Circle updated that the 3.3B USDC reserve deposit held at SVB was made fully available, and was transferred to a new bank.

No Effect on Bumper’s LM program

The LM program continued to run throughout the weekend with no hiccups, and we’re pleased to be able to say that the already battle-tested smart contracts were fully capable of handling the temporary de-peg event.

The purpose of the Liquidity Mining program is to reward those users who believe in our mission and vision of reformulating risk management in crypto, and who were prepared to help progress what we are developing by providing liquidity on the Uniswap DEX.

Whilst any form of investment generally carries some risk (including from Black Swan events like the ones we’ve witnessed recently), it’s actually to the crypto market’s credit that it’s recovered so quickly, even whilst the rest of the financial world is currently scrambling to shore up.

We don’t foresee any disruption to Bumper’s LM program going forward, nor is there any expected impact on development operations with getting Bumper to launch. The only impact that we saw was a misreporting of the BUMP token price on the LM dApp as a result of the depeg. This has been fully resolved, and will not affect reward distribution or the security of funds deposited in the smart contract.

Alternative Stablecoins for redemption in Bumper

The recent issues surrounding banking contagion and its effect on USDC serve to support Bumper’s decision to focus on a regulated and responsible stablecoin for the provision of both liquidity and Maker positions.

Bumper will continue reviewing stablecoin issuers, along with the inherent risks and capitalisation of each product, and we are exploring the possibility of multi-denominated Maker pools in a later version.

We will be making further comments on this in our upcoming Office Hours livestream on Thursday 16 March, 2023 at 10am UTC.



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