USDT Depegs, ATEM Car Club, & ETH Earnings

USDT and USDC are the top two collateralized stablecoins by Tether and Circle.
During Asia hours today, USDT saw a depeg from $1 to $0.945 at its lowest point on FTX. This did not last long and has since repegged back at $1. USDT was being sold off and USDC was being bought, causing the USDC to rise to a peak of $1.06. USDC/USDT was trading at ~1.1 at the peak of the depeg.
Institutions were taking advantage of this and arbitraging USDT as its redemptions were still being honored at a 1:1 ratio. This would have been a fairly risk-free trade for institutions, earning them 5.5% considering USDT’s lowest price today.
Curve’s 3Pool took a hit as its pool weightage started skewing heavily towards USDT as users sold off their USDT for USDC or DAI. This led to the pool skewing towards USDT, holding ~89% weightage of the 3pool.
Why did USDT take a hit and not USDC? On the surface level, USDT and USDC might look the same, but their risk profiles are vastly different. USDC is 100% backed by cash and short-term U.S. Government debt, ensuring that 1 USDC is always backed by 1 USD. USDT, on the other hand, has ~36% in commercial papers, a form of unsecured debt, that has a higher risk profile. This means that if those commercial papers default, USDT is likely to be under

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