Heightened selling activity in the Tether-issued stablecoin USDT has pushed major decentralized finance (DeFi) liquidity pools into a state of imbalance. 

In its latest weekly data debrief, crypto research firm Kaiko noted that two pools in particular – Curve’s 3pool and Uniswap V3’s main USDT-USDC pool – became particularly imbalanced as a result of the USDC selloff over the weekend.

Uniswap experienced net selling of $40 million and Curve saw net selling of $35 million, Kaiko said, adding that the Curve pool was heavily imbalanced at the time of its report and was holding 60% USDT. Meanwhile, USDT on centralized exchanges also briefly dipped below its peg to the U.S. dollar.

“It is unclear why traders are swapping out of USDT as there has been no clear bearish catalyst. In fact, Tether just reported massive Q2 revenue,” said the Kaiko analysts.

Tether CTO Paolo Ardoino suggested that the downward pressure on USDT was likely the work of a competitor, hinting at the timing of Binance listing its new stablecoin FDUSD. In a Twitter Spaces ask-me-anything session last week, Binance CEO Changpeng Zhao called USDT a “black box” due to an apparent lack of any publicly available audits.

In a tweet on Monday, Ardoino confirmed that Tether had redeemed $325 million worth of USDT.

“Even if this is an attack by CZ to prop up his new stablecoins (or supposed upcoming algo stable) this is the least confidence we’ve seen in the USDT peg by market makers in a long time,” said Adam Cochran, partner at Cinneamhain Ventures, noting that the USDT peg is off by the deepest amount since the FTX fallout.