MakerDAO, which manages the "decentralized" dai stablecoin, launched an emergency proposal to reduce the amount of DAI that can be minted with other centralized stablecoins after concerns over Circle's exposure to the shuttered Silicon Valley Bank pushed users away from USDC and into competing assets.

On Friday, Circle disclosed that $3.3 billion of its $40 billion in reserves remained stuck at Silicon Valley Bank, which was shut down last week by regulators. Its USDC stablecoin plunged from its intended dollar peg to $0.87, causing a massive outflow that pushed up demand for DAI.

The supply of USDC shrank by 5%, decreasing to 38.8 billion on March 13 from 41 billion on March 10 when SVB was shut. The supply of DAI shot up to 6.3 billion on March 13 from 5.1 billion over the same period, according to on-chain data aggregated by The Block.