What if a bank holding USDC reserves fails over a weekend?
A bank holding USDC reserves failing over a weekend depegs USDC and freezes DeFi pools globally — this is the literal March-2023 SVB episode, when USDC broke to ~$0.88 on $3.3bn stranded reserves before the depeg round-tripped on the federal backstop. ETH -6.5% leads as the dominant DeFi settlement asset wobbles; credit_spreads up is correct since the trigger is a bank failure. The skeptic's read: USDC repegged within 48h last time precisely because authorities backstopped depositors — absent that, the freeze is far worse.
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The butterfly cascade
How this trigger trickles across markets, left → right — the root shock, its first‑order moves, then the ripple effects. Drag any node; tap a market for its real price history.
Resolution timeline — how this probability is moving
Our model's odds (electric blue) over time vs the market's (Polymarket, amber), from the past toward the 0–6 months horizon. Each dot is a real macro event that nudged the probability — green pushed it up, red pushed it down. Tap a dot for the source. Loading the probability audit trail…
What it would mean
If this plays out, it is a mixed shock. A bank holding USDC reserves collapses over a weekend, briefly depegging USDC and freezing DeFi pools globally. The trigger decomposes into signed root‑shocks — Credit spreads ▲ · Crypto confidence ▼ — which propagate through our causal graph to the markets below.