ON–284: Stablecoins 💰
Coverage on USDC and USDT
Oct 25, 2024
USDC | USDT
📈 Global Stablecoin Supply is down 2.7% from a Peak on Aug. 30, but is Poised to Pick Back Up as Token Prices Continue to Edge Higher
- The lower stablecoin supply over the last 60 days is correlated with the decline of PayPal’s PYUSD, which was supported by liquidity incentives across a number of Solana DeFi protocols. At its peak, lending PYUSD was earning almost 20% APY on Kamino Finance compared to just 7.9% today. Zooming out however, the drop in supply looks insignificant compared to the 100x in stablecoin supply since early 2019 — current stablecoin market cap stands at $170.93B
- Euro-pegged stablecoins are rising with Circle’s EURC supply up more than 40% in the last month. Base has been the primary network to benefit, with EURC's value on the chain going from $22M to $48M. This coincides with Coinbase’s efforts to meet MiCA compliance, which it has highlighted as a differentiator against competitors.
- Banks have traditionally been reluctant to issue stablecoins. However, Societe Generale's EURCV, an Ethereum-based stablecoin and currently the only bank-issued one, rose 11% to reach a $41.7M market cap this month. Societe Generale has announced plans to launch EURCV on Solana as well. This, alongside BBVA’s stablecoin partnership with Visa, is a sign banks may finally be more active.
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Transaction Spotlight:
Bridge, which the payments giant Stripe acquired this week, isn’t the only high-growth stablecoin business around. Rising tokenholder and transfer activity shows increased adoption of Sling Money, a cross-border payment app built using USDP, a stablecoin issued by Paxos, which also issues PayPal's PYUSD Solana. Since the beginning of June, the number of USDP token holders on Solana has risen from 33 to 1,212 while the monthly transfer volume has risen from $111,426 to $839,199.
Bridge, which the payments giant Stripe acquired this week, isn’t the only high-growth stablecoin business around. Rising tokenholder and transfer activity shows increased adoption of Sling Money, a cross-border payment app built using USDP, a stablecoin issued by Paxos, which also issues PayPal's PYUSD Solana. Since the beginning of June, the number of USDP token holders on Solana has risen from 33 to 1,212 while the monthly transfer volume has risen from $111,426 to $839,199.
👥 Anthony Loya | Website | Dashboard
- USDC's transaction volume had peaks reaching nearly $200B in late 2022 during periods of high market activity. Ethereum maintains the largest share of transaction volume, though Layer 2 solutions like Arbitrum have captured increasing portions since 2023. The pattern shows cyclical behavior with peaks roughly every 3 to 4 months, indicating regular periods of peak activity. Volumes have decreased from 2022, but current levels of around $80 to $100B represent a substantial increase from the pre-2021 era.
- Transaction activity surged from under 2M daily in early 2021 to peaks of over 20M in late 2023, with notable Q4 growth on Arbitrum, Base, and Solana. Layer 2s and alternative chains are capturing more activity, reducing Ethereum's dominance. Current levels of ~12M daily transaction suggest ecosystem maturity.
- Distribution of USDC transactions across blockchains shows distinct patterns. Solana leads in total count, mostly for amounts under $100, while Ethereum is dominant for large transactions over $1M. Layer 2s capture mid-sized transactions between $1k and $100k, indicating chain specialization as users choose based on size and cost.
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Transaction Spotlight:
Users are unafraid to send USDC in nine figure clips, even on Ethereum Layer 2s. Case in point, here's a transfer of $102,616,661.02 of USDC, sent on Base. The sender transferred the entire amount to Binance 76. Additionally, the transaction’s gas fee was minimal at $0.002528.
Users are unafraid to send USDC in nine figure clips, even on Ethereum Layer 2s. Case in point, here's a transfer of $102,616,661.02 of USDC, sent on Base. The sender transferred the entire amount to Binance 76. Additionally, the transaction’s gas fee was minimal at $0.002528.
👥 Henry Child | Website | Dashboard
- Tether's growth is accelerating — Q3 welcomed 36M new accounts, the best quarter yet for the stablecoin behemoth.
- With 768M issued in the first 6 months, USDT's growth on TON is the fastest of any stablecoin on any chain to-date.
- 67% of all USDT on Tron is held outside of the top 500 accounts, showing the widespread distribution of the stablecoin on the blockchain. For reference, the figure was just 49% end of 2023, and 57% end of Q2 2024.
