• Stablecoins aren’t nearly as sexy as re-staking or AI, but they are the crypto product with far and away the most real-world use amongst non-crypto-natives. There are now 93.5M crypto addresses that hold stablecoins, a rapidly growing figure that is on track to reach 100M within the next few months. Tether holders represent the vast majority, with over 76M. USDC follows with 9.8M, and BUSD with 6M.

• Looking at the active addresses of stablecoins, one wouldn’t have even known there was a bear market! Since inception, it is rare to see a quarter without a new all-time high in monthly active addresses. The last full month, March 2024, continued this trend, with over 25M addresses transferring a stablecoin. Nearly 80% of those addresses are on TRON and BSC, followed by Solana and Ethereum.

• Zooming in and looking at transfer volumes, one notices that despite the dominant active address counts, TRON and BSC are a minority of $ volumes, demonstrating their popularity amongst retail participants. On the opposite side of the spectrum, Solana and Ethereum lead in this metric, due to their advanced DeFi ecosystems and institutional adoption.

• 💦🔬 Tx-Level Alpha: The largest stablecoin, Tether, recently announced a partnership with TON, Telegram Open Network. This deal deploys USDT onto the blockchain of the eponymous messaging app, opening the door for native usage of Tether to the nearly billion Telegram users.

• As a byproduct of the heavy demand for utilizing USDe within the farming environment both through Ethena as well as through direct integrations with protocols like Gearbox and Pendle, it only took 126 days for USDe to reach 2b in supply issued. At the days it took USDe to hit this amount, USDC's supply was 601M, FRAX was 390M, and DAI was 774M. The USDe-USDT pair on Uniswap has also seen significant volume since it was seeded, with volume hitting +$2B faster than other leading stablecoin pairs.

• Despite ENA's introduction, USDe-USDT has had more volume than ENA-ETH, though ENA-ETH's share grew from 22% to 52% last week. Initially, high volume in the alt pair was due to sales prompted by negative funding rates, but shifted to buys due to confidence in Ethena's handling of USDe redemptions.

• Even with negative funding resulting in Ethena incurring a day of net negative payouts of -$140k and handling $25M in daily USDe withdrawn, there weren't significant peg deviations within the USDe-UDC pool on Curve. Since this period of withdrawals hitting the market there has been new mint flow hitting circulation.

• 💦🔬 Tx-Level Alpha: This transaction is one of the largest swaps done recently within the USDe-USDC Curve pool. This EOA swapped 3.5M USDC for 3.49M USDe and has yet to deploy it within any protocols integrating USDe. However, this wallet has traded Pendle USDe products in the past. The size of the trade shows how significant liquidity has built up within the USDe environment on Curve to support trades of this size, as well as the comfort level that market participants have in swapping this much size for USDe.

• GHO is the only decentralized, overcollateralized stablecoin native to the Aave Protocol. Users can deposit asset(s) and borrow GHO directly from Aave v3 on Ethereum. To incentivize participation, users enjoy a discounted borrow rate of up to 30% by staking AAVE tokens in the Safety Module. With the recent launch of the Merit program, users receive an airdrop for borrowing GHO and enjoy an additional boost multiplier for holding stkGHO.

• With a weighted borrow rate of 12.26% and 50M units of GHO debt, the Aave DAO is on track to generate $6.13M in annualised GHO revenue. This revenue stream has the potential to sustain all service providers, or to significantly offset the 820 AAVE being distributed daily to Safety Module depositors.

• Since July 17th, 2023, GHO has maintained a collateralization ratio above 2.5, ensuring its stability. The majority of collateral consists of wstETH and wETH, representing 40.01% and 23.89% respectively.

• 💦🔬 Tx-Level Alpha: This Gearbox v3 user is using GHO debt to farm Ethena's shards at x5.54 leverage. The user deposits 4,500 USDC into Gearbox v3, opens a GHO Credit Account, swaps 4,500 USDC to 4,520 GHO via Balancer, borrows 20,337 GHO and then swaps all 24,857 GHO for 24,705 USDe. The result, a USDe collateral position with GHO debt and a health factor of 1.09. Users can earn 30%+ by depositing GHO on Gearbox v3 via GEAR rewards, GHO rewards, and borrower interest.

• In early 2023, following the rise of the Dai Savings Rate (DSR) to 5% and its increased exposure to Real World Assets, MakerDAO was able to strategically introduce sDAI, a yield bearing stablecoin, that increases from the revenue generated from Maker. This brought rise to Spark Protocol, which both acted a frontend for sDAI and a money market to help DAI growth tremendously, making it the fastest growing protocol of 2023, peaking in March at a total of $105M sDAI and $1.3B DAI supplied.

• Since then, we've seen the expansion of several other integrations that include Chai, Verus, Blast and others, who have a total of $380M staked in DAI in the DSR, increasing the supply share for DAI within the protocol. In the prior year, there was $104M in the DSR, to date there's been well over $1.8B.

• The DAI HODL Wave, showcases the holding length for DAI users. Holders of 1-2 years or less have increased tremendously from $757M to $1.9B and 1-3 months holders have increased from $258M to $777M in the span of the same month.

• 💦🔬 Tx-Level Alpha: MakerDAO deployed $100M DAI directly to sUSDe/DAI and USDe/DAI markets, to enable overcollateralised liquidity offerings for Ethena with Spark Protocol. This long-term collaboration between Morpho, Maker, Ethena, and Spark showcases demand for DAI and empowers DeFi users to broader exposure into DeFi solutions.

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