Monthly Stable Report #2: August 26 - September 22
Hey hey hey, are you missing stability? I wasn’t able to publish the weekly stable reports over the last few weeks, but guess what? I’m back with a monthly stablecoin report covering all the data from August 26th to September 22nd. If you’re ready, let’s dive in without wasting any time—this one’s going to be a long one! This report aims to provide insights into the competition within the stablecoin market. To better analyze the market, we categorize stablecoins into three groups and blockchains into four. The groups of stablecoins are called “leagues,” and the chains are categorized as “tiers.” Let’s get started. In this report, you’ll find:
Total review of the stablecoin market and a breakdown by projects.
Total breakdown of the stablecoin market by blockchains.
The most attractive stablecoin yields.
Important events and news from the last month.
Useful resources for more stablecoin information.
Total Review of Stablecoin Market and Breakdown by Projects
As of September 22nd, the total stablecoin market stands at $171.52 billion, marking an increase of 1.53% compared to August 26th. USDT’s dominance remains relatively unchanged, now at 69.6%, down slightly from 69.8% last month.
The First League
The total market cap of stablecoins with a market cap over $1 billion—the first league—reached $165.22 billion, up by 1.36% compared to four weeks ago. PayPal’s PYUSD remained in this league for only a week, as it dropped to the second league on August 29th. The pie chart below illustrates the market cap distribution of the stablecoins in this league as of September 22nd.
In addition to PYUSD’s drop in the first week, FDUSD flipped USDe last week.
Over the past month, the two leaders of this league, USDT and USDC, both saw growth. USDT gained 1.2% in market cap, while USDC grew by 3.8%. DAI remained stable, while FDUSD and USDe experienced market cap losses of 6.1% and 12.1%, respectively. The table below shows the 28-day change in market cap of the stablecoins in the first league.
The Second League
Now, let’s take a look at the second league, which includes stablecoins with a market cap between $100 million and $1 billion. The total market cap of the stablecoins in this league increased by 6.86% last month. Four weeks ago, there were 10 stablecoins in this league; as of September 22nd, there are 13. As mentioned above, PYUSD rejoined the league, and the other two new competitors are Sky’s USDS (a new version of DAI) and DEUSD. The pie chart below illustrates the market cap distribution of the stablecoins in this league.
In addition to PYUSD’s comeback in the first week, we saw a couple more rank changes last week. First, USDD flipped PYUSD and became the biggest competitor in the league. USDS entered the league in 5th place, and GHO flipped DOLA, while DEUSD joined the league by flipping USDP. The table below shows the rank changes in the second league.
Over the past 28 days, GHO performed exceptionally well with a 24.2% growth, followed by USD0, which grew by 18.1%. On the negative side, PYUSD lost 30.3% of its market cap, while USDB faced a 9.5% loss. The market cap changes for other stablecoins were limited to 3.5%. The table below shows the 28-day change in market cap for stablecoins in the second league.
The Third League
The third league contains stablecoins with a market cap between $30 million and $100 million. The total market cap of this league decreased by 2.78% last month, reaching $818.17 million. The pie chart below illustrates the market cap distribution of the stablecoins in the third league.
In the third league, we witnessed a lot of rank changes each week. To keep the report concise, I’m avoiding listing all of them here, but curious readers can check the rank table below.
The biggest gainer in this league last month was MIM, with a 13.1% growth, followed by AUSD with an 11.2% growth and SUSD with a 10.6% market cap increase. Additionally, USDA, LISUSD, and CUSD also showed notable growth. On the negative side, USD3 shrank by 24.7%, and GUSD shrank by 21.4%. Both crvUSD and LUSD also faced significant losses. The table below shows the 28-day change in market cap of the stablecoins in the third league.
Total Breakdown of Stablecoin Market by Blockchain
Now, let’s examine the competition among chains to attract more stablecoins. Since Ethereum and Tron hold significant dominance compared to other chains, we will analyze them separately. The pie chart below shows how Ethereum and Tron compare to other chains in terms of stablecoin holdings.
Let’s start with the A-tier, i.e., Ethereum and Tron.
The A-tier
Total stablecoin issuance on the A-tier chains increased by 1.27% over the last four weeks, reaching $144.57 billion. The pie chart below shows their dominance.
Both of these chains saw positive issuance last month. Total stablecoin issuance on Ethereum increased by 1.77%, reaching almost $84.6 billion. The table below shows the 28-day change in market cap of the stablecoins on blockchains in the A-tier.
The B-tier
This tier holds $22.56 billion in stablecoins, with a 1.93% increase compared to August 26th. As in previous weeks, seven chains are competing in this tier, with Binance Smart Chain (BSC) leading the competition. The pie chart below illustrates the market cap distribution of the B-tier chains.
In the second and third weeks, we saw intense competition between Polygon and Avalanche. First, Polygon flipped Avalanche to take the 5th rank in this tier. However, a week later, Avalanche reclaimed the 5th position by flipping Polygon back.
At the end of the fourth week, the only stablecoin losers were Solana and Polygon, with losses of 4.26% and 3.83%, respectively. On the other hand, Base and Avalanche both saw an increase in total stablecoin issuance of around 10% each. The gains for other chains were limited to 3.88%. The table below shows the 28-day change in market cap of the stablecoins on blockchains in the B-tier.
The C-tier
The C-tier experienced a 6.85% increase in total stablecoin issuance. As of September 22nd, the total issuance in the C-tier stands at $4.1 billion. The biggest share of this tier belongs to Near, followed closely by Ton. The pie chart below illustrates the market cap of the stablecoins on blockchains in the C-tier.
Over the last few weeks, we observed several flippenings. Instead of listing all of them, I’m leaving the rank table below for you to check.
The biggest stablecoin gainer in this tier over the past weeks was Mantle, with a 41.2% increase in stablecoin issuance. Sui gained 11.3%, Ton increased by 8%, and Algorand saw a 7.8% rise in issuance. Aptos and Scroll also recorded notable gains. On the negative side, Stellar lost 54.1% of its stablecoin issuance. Blast and Celo were also among the losers in this tier. The table below shows the 28-day change in market cap of the stablecoins on blockchains in the C-tier.
The D-tier
Let’s investigate the D-tier now. As of September 22nd, this tier includes 13 chains, with dominance ranging between 12% and 4.1%. The pie chart below shows the competition among chains in the D-tier.
The rank changes in the first and last weeks were mostly caused by Heco. However, the dominant stablecoin on Heco, HUSD, has been badly depegged for months. The manipulative price changes of HUSD can affect the ranks in this tier, as its total circulation is still at 222.6M. Currently, I can’t extract depegged stablecoin data from the chain data provided by DefiLlama, which is why we see unrealistic rank changes in this tier. That said, the rank changes in the third week were caused by zkSync’s flippening of Fraxtal and Osmosis. Also, Ronin joined the competition that week, taking 7th place. Here’s the rank table for more information:
Last month, Linea, Metis, and Osmosis lost stablecoin issuance by 11.2%, 4.2%, and 3%, respectively. On the positive side, zkSync showed 14.5% growth, followed by an 8% increase in PulseChain. Fraxtal and StarkNet also performed remarkably well. The table below shows the 28-day change in market cap of the stablecoins on blockchains in the D-tier.
The Most Attractive Stablecoin Yields
Let's take a look at the stablecoins offering the highest APYs. These yields are sourced from DeFiLlama and include all types of yields with over $10 million in TVL. Remember that interactions with contracts carry various risks, including hacks, exploits, impermanent loss, depegging scenarios, etc. Please be aware of these risks before engaging and always DYOR!
Important Events and News from Last Month
USDC Hits 15-Month Market Cap High, Reaches $34 Billion
USDC’s market capitalization has risen to $34 billion, recovering from a November 2023 low of $24 billion. Despite this recovery, USDC still trails far behind Tether (USDT), which dominates with a $117 billion market cap.
Aave Proposes BUIDL Shares as Collateral for GHO Stablecoin
Aave is proposing to onboard BlackRock's BUIDL fund shares as collateral for its stablecoin, GHO. This move aims to improve GHO's peg to the U.S. dollar and generate additional yield through real-world assets (RWAs), boosting DeFi integration.
Sky and Aave Collaborate to Promote USDS Adoption
Aave and Sky (formerly MakerDAO) have agreed on a proposal to promote Sky’s new USDS stablecoin through Aave’s platform. The proposal includes a 3.33 million SPK token incentive for sUSDS deposits on Aave, aiming to boost the adoption of USDS and generate revenue for both projects.
Trump Family Partners with Aave for DeFi Stablecoin Project
World Liberty Financial, a web3 project by the Trump family, is collaborating with Aave to develop a stablecoin-focused lending platform. The partnership aims to drive mass adoption of stablecoins and DeFi, with the Trump family expanding their crypto endeavors.
Injective Launches BUIDL Fund Index for Treasury Market Exposure
Injective has introduced a perpetuals market allowing users to trade based on the supply of BlackRock’s BUIDL Fund, the leading tokenized U.S. Treasury fund. This marks Injective’s venture into real-world assets, enabling leveraged positions in the Treasury market through decentralized exchanges.
Binance Labs Invests in OpenEden to Boost Real-World Asset Development
Binance Labs has invested in OpenEden, a Singapore-based RWA protocol, to enhance its global T-Bill offerings. OpenEden, with $109 million in locked value, has seen its T-Bill TVL grow nearly tenfold in 2024, establishing itself as a major issuer of tokenized U.S. Treasuries.
Sky Proposes Offboarding Wrapped Bitcoin Over Justin Sun Involvement
Sky (formerly MakerDAO) has proposed fully offboarding Wrapped Bitcoin (WBTC) due to concerns over Justin Sun's involvement in its ownership restructure. The proposal aims to gradually phase out WBTC as a collateral asset in Sky's ecosystem to mitigate potential risks.
Stablecoin Use in Emerging Economies Rises, Ethereum Favored for Transactions
A recent survey in emerging markets such as Brazil, Nigeria, Turkey, Indonesia, and India shows growing demand for stablecoins, with 57% of respondents increasing their usage in 2024. Surprisingly, Ethereum remains the most popular blockchain for stablecoin transactions, despite high fees.
TON Partners with Curve to Launch Stable-Swap Project
The TON Foundation is partnering with Curve Finance to develop a stable-swap platform on the TON blockchain. This collaboration aims to improve liquidity and trading efficiency for stablecoin swaps, leveraging Curve’s market-making model.
Sky Considers Solana Expansion
Sky (formerly MakerDAO) is considering expanding to Solana as part of its cross-chain growth strategy. The move would bring SKY, USDS, and sUSDS to Solana via the Wormhole bridge, potentially boosting liquidity and adoption on the Solana network.
Stablecoins Reach Systemic Importance with $170 Billion in Circulation
Stablecoins are now the 18th-largest holders of U.S. Treasuries, with total supply returning to an all-time high of $170 billion, according to Bernstein. The increasing use of stablecoins for cross-border payments and savings reflects their growing role in the global financial system.
Bridge Raises $58M to Develop Stablecoin Payment Network
Bridge, a stablecoin-based payment network founded by Square and Coinbase alumni, raised $58 million to build a global platform for seamless stablecoin transactions. With notable customers like SpaceX, the company aims to simplify stablecoin payments and facilitate transfers across multiple blockchains.
Ethena’s USDe Token Faces $1B Outflows Amid Crypto Market Downturn
Ethena’s USDe token saw a significant $1 billion outflow, dropping its market cap to $2.7 billion as crypto markets cooled. Despite the challenges, USDe maintained its $1 peg, with the protocol proving resilient during market stress tests, though yield rates dropped from March’s highs.
Revolut Reportedly Planning to Launch Stablecoin
Fintech giant Revolut is developing its own stablecoin, aiming to expand its cryptocurrency offerings with a compliance-first approach. If launched, Revolut will join other major players like PayPal and Ripple in entering the lucrative stablecoin sector.
Sky’s USDS Stablecoin Freeze Could Be Decided by Decentralized Governance
Sky's new stablecoin, USDS, may include a freeze function in the future, which could be overseen by a decentralized governance body. Sky co-founder Rune Christensen mentioned that if activated, users could appeal any freezes through a transparent, decentralized court-like process.
Japan's Largest Banks Back Stablecoin Project for Global Trade
Japan's top banks, including Mitsubishi UFJ and Sumitomo Mitsui, are backing Project Pax, a stablecoin initiative aimed at streamlining cross-border transactions. The project seeks to address inefficiencies in global trade by integrating stablecoins into business settlements.
Tether Invests $100M in Agriculture Amid Increasing Stablecoin Competition
Tether has made a $100 million investment in Latin American agricultural firm Adecoagro, marking its first venture into the agriculture sector. As competition in the stablecoin market intensifies, Tether continues to diversify its investment portfolio, maintaining its dominant position with USDT.
Ethena’s Synthetic Stablecoin Faces Risks Amid Market Challenges
Ethena, a synthetic stablecoin platform, faces increasing risks as market conditions have led to declining yields. While Ethena’s USDe token remains pegged to the dollar, its reliance on USDT-margined contracts introduces potential vulnerabilities in the case of a USDT depeg or prolonged negative funding rates.
Tether and Tron Launch Financial Crime Unit to Combat Illicit Activities
Tether and Tron have joined forces with TRM Labs to establish a financial crime unit, T3 FCU, focused on identifying and freezing illicit USDT transactions on the Tron blockchain. The unit has already frozen over $12 million in USDT linked to illegal activities.
Consumer Protection Watchdog Warns About Tether’s Lack of Transparency
A report from Consumers’ Research has raised concerns about Tether's lack of transparency regarding its US dollar reserves. The watchdog group compared the situation to the collapse of FTX, urging regulatory action to ensure accountability for USDT's reserves.
Tether Hires PayPal's Former Head of Government Affairs
Tether has appointed Jesse Spiro, former head of PayPal's blockchain and crypto division, as its head of government affairs. Spiro will lead Tether's engagement with regulators and lawmakers, aiming to strengthen the company's position amid increasing regulatory scrutiny.
Circle Moves Headquarters to New York Ahead of IPO
Circle, the issuer of USDC, is relocating its global headquarters to New York’s One World Trade Center in preparation for its upcoming IPO. The move is part of Circle’s broader strategy to bring stablecoins into the mainstream and enhance their role in the global financial system.
Circle Predicts Stablecoins Will Become Mainstream Payment Method
Circle expects stablecoins to become a widely adopted global payment method, driven by increased regulatory clarity and integration with payment platforms. The company emphasized the importance of global harmonization in stablecoin regulations to ensure compliance and growth.
Tether’s Market Share Reaches 75% as USDT Dominates
Tether’s USDT now controls 75% of the stablecoin market, up from 55% two years ago, with a supply of $118 billion. Tether continues to generate significant revenue, netting $400 million in the past month, and its USDT balance on exchanges hit a record $20.3 billion, signaling increased investor activity.
Circle’s USDC to Launch on Sui Network
Circle’s USD Coin (USDC) will soon be supported on the Sui network via the Cross-Chain Transfer Protocol (CCTP). This marks USDC’s expansion to its 16th blockchain network, enabling seamless transfers and enhancing interoperability within the Sui ecosystem. The integration is expected to boost Sui’s usability and security for Web3 developers.
USDT on TON Chain Surpasses $1 Billion
Tether’s USDT has reached a milestone of $1 billion in circulating supply on The Open Network (TON). This growth highlights USDT’s dominance among stablecoins, especially with TON-based applications on Telegram benefiting from its integration. Stablecoins, including USDT, now represent $172 billion in circulation globally, cementing their role in crypto transactions.
Circle Integrates USDC With Brazil and Mexico’s Payment Systems
Circle has integrated USDC with Brazil’s PIX and Mexico’s SPEI payment systems, allowing businesses in both countries to utilize USDC directly through local financial institutions. This development aims to improve the efficiency of cross-border transactions and reduce the reliance on international wire transfers.
BNB Chain Introduces Gasless Stablecoin Payments
BNB Chain has launched a gasless transaction initiative for stablecoins like USDT, USDC, and FDUSD. In collaboration with centralized exchanges (CEXs), wallets, and bridges, this initiative is designed to make stablecoin transfers fee-free, enhancing crypto adoption and usability.
BitGo Introduces USDS Stablecoin with 98% Earnings Distribution
BitGo has launched a new stablecoin, USDS, that will distribute up to 98% of its earnings to participants in the ecosystem. Set to launch in January 2025, USDS is backed by short-duration Treasury Bills and aims to challenge major stablecoin issuers like Tether and Circle with its rewards model.
Ex-Coinbase Executives to Launch Exchange Using PayPal Stablecoin
Former Coinbase executives have announced the launch of TrueX, a stablecoin-native exchange that will use PayPal USD (PYUSD) as its default settlement currency. TrueX is designed to provide secure, non-custodial trading for US institutions and international clients.
Tether’s $118B Reserves Raise Audit and Liquidity Concerns
Investors have raised concerns over Tether’s $118 billion reserves, citing the lack of a comprehensive third-party audit. While Tether has been fined in the past for misrepresenting its reserves, critics worry about potential liquidity risks similar to the FTX collapse, emphasizing the need for more transparency.
Travala Integrates Solana-Based Tokens for Travel Payments
Travala, a crypto-native travel agency, has partnered with Solana to allow users to book flights and hotels using SOL, USDT, and USDC on the Solana blockchain. This integration brings faster and cheaper transaction options for travelers and supports the growing Solana ecosystem.
Stablecoins Challenge Fiat Dominance in Eastern Asia
Stablecoins are gaining traction in Eastern Asia, where they are starting to replace fiat currencies in countries facing currency devaluation and inflation. Hong Kong has emerged as the region’s fastest-growing crypto hub, with stablecoins accounting for 40% of the total value received in the country. This growth is expected to bring further regulatory scrutiny as stablecoins continue to disrupt traditional financial systems.
Useful Resources for More Stablecoin Information
Last Words
It’s been a while since the last report, right? I hope this big report satisfied your stablecoin report cravings! I haven’t been able to focus much on my Substack recently, but I’ll make it up to you. If you don’t want to miss anything, don’t forget to subscribe!