Weekly Stable Report #8: August 19-25
Dear stablenjoyer, are you ready for this weeks report? This report is prepared to give 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 named “leagues,” and the chains are named “tiers.” Let’s begin this week’s report. In this report, you will 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 week.
Useful resources for more stablecoin information.
Total Review of Stablecoin Market and Breakdown by Projects
As of August 25th, the total stablecoin market stands at $169.22 billion, marking an increase of 0.64% compared to August 18th. USDT's dominance has slightly decreased, now at 69.8%, down from 70% last week.
The First League
The total market cap of stablecoins with a market cap over $1 billion, i.e., the stables of the first league, is $164.23 billion, up by 1.17% compared to the previous week. Last week, PayPal’s PYUSD reached a $1 billion market cap, officially joining the first league. With PYUSD now in the mix, there are six stablecoins competing in this league. The pie chart below illustrates the market cap distribution of the stablecoins in this league.
Last week, centralized stablecoins in the first league grew, while decentralized ones shrank. FDUSD grew by 39.5%, reaching $2.82 billion, and PYUSD's market cap increased by 19.9%, corresponding to more than $150 million in newly minted PYUSD. On the other hand, USDe's market cap decreased by 4.37%, and DAI's by 1.85%. The table below shows the 7-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 0.85% last week. There are 10 stablecoins in this league; previously, it was 13. As you already know, PYUSD moved to the first league as of last week. FLEXUSD and HUSD are no longer listed in this league—they should never have been listed since they were already depegged. My apologies. The pie chart below illustrates the market cap distribution of the stablecoins in this league.
Aside from those three stablecoins, there were no significant changes in this league last week. The highest gainer was USD0, with a 10% market cap increase, followed by GHO, which saw a 4.4% increase. The increases of the other stablecoins were capped at 2%. On the negative side, we saw slight decreases for USDB and USDP, but these were also limited to 2%. The table below shows the 7-day change in market cap of the 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 increased by 0.44% last week, reaching $809 million. The pie chart below illustrates the market cap distribution of the stablecoins in the third league.
We witnessed four flippenings in this league last week. USD+, Agora Dollar, USDM, and cgUSD improved their ranks, while BUSD (Paxos), SUSD, USD3, and LISUSD dropped in the rankings. The table below shows the new ranks of the third league.
The biggest gainer in this league last week was USDM, with an 11.5% growth, followed by USD+ and Agora Dollar, both with about an 8% market cap increase. The other positive performers saw market cap increases below 1%. On the negative side, SUSD shrank by 12.4%, and LISUSD shrank by 3.9%. The market cap decrease for the other negative performers was limited to 2.5%. The table below shows the 7-day change in market cap of the stablecoins in the third league.
Total Breakdown of Stablecoin Market by Blockchains
Now, let’s examine the competition among chains to attract more stablecoins. Since Ethereum and Tron have 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 holding stablecoins.
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 0.84% last week, reaching $142.8 billion. Ethereum gained 0.2% dominance compared to the previous week. The pie chart below shows their dominance.
Both of these chains saw positive issuance last week. Total stablecoin issuance on Ethereum increased by 1.25%, reaching almost $83 billion. The table below shows the 7-day change in market cap of the stablecoins on blockchains in the A-tier.
The B-tier
This tier holds $22.2 billion in stablecoins, with a 1.91% increase compared to the previous week. As in previous weeks, seven chains are competing in this tier, with Binance Smart Chain leading the competition. The pie chart below illustrates the market cap distribution of the B-tier chains.
The blockchains in the B-tier maintained their ranks last week. Optimism was the only loser in this tier in terms of stablecoin issuance, with a negligible decrease. Solana showed significant growth, with a 5.78% increase. Avalanche and Polygon performed well, with growth of 2.8% and 2.2%, respectively, while the growth of other chains was limited to 1.8%. The table below shows the 7-day change in market cap of the stablecoins on blockchains in the B-tier.
The C-tier
The C-tier experienced a 2.11% increase in total stablecoin issuance. As of August 25th, the total issuance in the C-tier is $3.9 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.
Last week, we observed two flippenings in this tier. Celo flipped Fantom, and Scroll flipped Omni. The table below shows the new ranks after these flippenings. In addition to these changes, Algorand joined the race in this league by reaching $102 million.
The biggest stablecoin gainer in this league last week was Celo, with an 8.4% increase in stablecoin issuance. Algorand followed Celo with a 7.6% increase. Additionally, Stellar, Mantle, Scroll, and Aptos achieved growth rates of more than 3.7%. On the red side, we saw decreases in Sui, Blast, and Gnosis, but their losses were limited to 1.8%. The table below shows the 7-day change in market cap of the stablecoins on blockchains in the C-tier.
The D-tier
Let’s investigate the D-tier now. This tier includes 12 chains, with their dominance ranging between 13.1% and 4.9%. In addition to Algorand, smartBCH is no longer in this league either—this correction should have been made in previous weeks, and I apologize for the mistake. The pie chart below shows the competition among chains in the D-tier.
Last week, there was an error with Heco being listed incorrectly. Data from DefiLlama assumed that HUSD on Heco was not depegged, but this has been corrected. This is the reason behind the rank change of Heco compared to last week. In addition to rank changes due to Heco’s incorrect position in the previous week, Fraxtal flipped Linea and zkSync. The table below shows the new positions.
Last week, only Fraxtal showed meaningful performance in terms of stablecoin issuance, with its total stablecoin market cap increasing by 12%, reaching almost $60 million. As stated above, Heco's change is meaningless. The 7-day change in stablecoin market cap on other chains was limited to 1.87% for both positive and negative performers. The table below shows the 7-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 Week
DMM and Progmat to Launch Stablecoin for Seamoon Protocol:
Japanese stablecoin platform Progmat and DMM.com are collaborating to introduce a stablecoin for the Seamoon Protocol. The stablecoin will be rolled out in three phases and will be used as the primary payment method within the Seamoon ecosystem. The project aims to enhance financial stability and support DMM’s anime-inspired Web3 universe.
Tether Avoids Blockchain Launch Amid Market Saturation:
Tether has decided not to launch its own blockchain, citing market saturation and the availability of other robust blockchains. Instead, the company continues to expand USDT's presence, recently launching on the Aptos blockchain to reduce transaction costs and improve digital currency accessibility.
Justin Sun Defends Bitcoin Withdrawal from USDD Collateral:
Justin Sun, founder of Tron, downplayed concerns over the removal of 12,000 Bitcoin from USDD's collateral without a community vote. Sun explained that the mechanism allows collateral holders to withdraw without approval if the collateral exceeds a specified amount, comparing it to MakerDAO’s DAI.
Anchorage Digital Adds PayPal Stablecoin Yield to Custody Platform:
Anchorage Digital launched a rewards program for clients who custody PayPal USD (PYUSD) stablecoins, offering rewards without rehypothecation or staking. This move is part of Anchorage’s strategy to enhance digital asset custody services, competing with similar programs from Coinbase.
Wyoming Stablecoin Set for Q1 2025 Launch:
Wyoming plans to launch a state-issued, dollar-pegged stablecoin in Q1 2025, backed by US Treasury bills and repurchase agreements. Governor Mark Gordon highlighted Wyoming’s proactive stance on digital asset regulations, positioning the state to capture growth from digital assets.
Abu Dhabi Proposes Regulatory Framework for Fiat-Referenced Tokens:
Abu Dhabi’s financial regulator has proposed a regulatory framework for fiat-referenced tokens (FRTs), a type of stablecoin. The framework includes operational restrictions, reserve asset requirements, and daily mark-to-market valuations. The regulator is seeking public feedback before finalizing the regulations.
Tether Mints Another $1B USDT on Tron Network:
Tether minted an additional $1 billion USDT tokens on the Tron network, bringing the total USDT minted in the last year to $33 billion. This move follows a similar mint on Ethereum, likely replenishing Tether’s inventory to meet high demand for stablecoins on Tron.
Stablecoin Market Cap Hits New All-Time High:
The stablecoin market cap, excluding algorithmic stablecoins, has reached a record high of $168 billion after 11 consecutive months of growth. This surpasses the previous peak of $167 billion in March 2022. Analysts suggest the increase could indicate new money entering the crypto market, with Tether (USDT) and Circle’s USD Coin (USDC) leading the growth.
PayPal’s PYUSD Reaches $1B Market Cap:
PayPal’s USD-pegged stablecoin, PYUSD, has crossed the $1 billion market cap mark. Launched in 2023 and backed 1:1 by US dollars, PYUSD is issued by Paxos Trust Company. Despite its growth, PYUSD still trails behind market leaders USDT and USDC. PayPal has been expanding PYUSD’s accessibility through partnerships and reward programs.
Tether Recovers $108.8M in USDT from Illicit Activities:
Since its launch in 2014, Tether has assisted in recovering over $108.8 million in USDT linked to illegal activities. The company has blocked more than 1,900 cryptocurrency wallets involved in illicit activities, with recent recoveries including $5 million from “pig-butchering” scams. Tether continues to collaborate with global law enforcement to combat fraud.
M^0 Protocol Partners with Fireblocks for Stablecoin Custody:
M^0, a protocol allowing institutions to mint stablecoins backed by U.S. Treasury bills, has partnered with Fireblocks for crypto custody services. The partnership enables seamless integration for institutions minting stablecoins and offers flexible yield management options. M^0 has already gathered $30 million in over-collateralized reserves, though the service is not available to U.S. users.
USDC Market Capitalization Surges to 15-Month High:
The market capitalization of Circle’s USDC has surged to $34 billion, its highest level since March 2023. This growth follows a significant decline triggered by the collapse of Silicon Valley Bank and ongoing regulatory pressures. Despite its recovery, USDC still trails Tether's USDT, which commands a market cap of $117 billion.
Tether to Launch UAE Dirham Stablecoin:
Tether, the issuer of USDT, plans to launch a stablecoin pegged to the UAE Dirham (AED). The new stablecoin will be fully backed by liquid UAE-based assets and developed in partnership with Phoenix Group, a leader in blockchain mining solutions. This launch aligns with the UAE's growing role as a global economic hub and further solidifies Tether’s dominance in the stablecoin market, where USDT holds a 70% market share.
Chronicle Launches RWA Oracle via M^0 Integration:
Chronicle has launched its real-world asset (RWA) oracle through an integration with the Ethereum-based stablecoin minting protocol M^0. This partnership enhances the security and transparency of M^0's overcollateralized stablecoin $M, which is backed by U.S. Treasuries. The M^0 team expects the platform to scale to several billion dollars in the coming years, with Chronicle playing a key role in maintaining the integrity of the protocol.
UXD Protocol to Sunset Its Stablecoin:
The Solana-based UXD Protocol has announced plans to sunset its stablecoin due to a lack of product-market fit. The project, which previously reached a total value locked (TVL) of $40 million, will return its multi-million dollar insurance fund to token holders and investors. The decision is contingent on approval by DAO stakeholders in a governance vote. The shutdown process is expected to take up to two years.
Tether Expands USDT Stablecoin to Aptos Blockchain:
Tether has launched its USDT stablecoin on the Aptos blockchain, aiming to provide users with lower transaction costs compared to more expensive networks like Ethereum. This integration marks Tether's continued expansion, as it previously found success primarily on the Tron and Ethereum networks. Despite stopping minting on other blockchains like EOS and Algorand, Tether reported a record net profit of $5.2 billion for the first half of 2024.
Useful Resources for More Stablecoin Information
Last Words
I hope you've found this report informative. See you in the next one! And keep enjoying stability!