Weekly Stable Report #9: September 23-29
Hey hey hey, your weekly stable report is here! 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 September 30th, the total stablecoin market stands at $172.01 billion, marking an increase of 0.37% compared to September 23rd. USDT's dominance has slightly decreased, now at 69.48%, down from 69.59% 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 $165.51 billion, up by 0.26% compared to the previous week. The pie chart below illustrates the market cap distribution of the stablecoins in this league.
We witnessed a flippening in this league last week. FDUSD’s 4.39% market cap loss caused a rank loss, and now USDe is holding the fourth position in this league.
Last week, only USDT and USDC increased their total issuance in this league, while DAI, USDe, and FDUSD faced market cap losses. 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 3.85% last week. The pie chart below illustrates the market cap distribution of the stablecoins in this league.
Last week, 3 flippenings happened in the second league. Sky’s USDS flipped TUSD and BUIDL to get the third rank in this league. In addition, USD0 flipped USDB, and DOLA flipped GHO. The table below shows the new ranks in the second league.
Sky’s USDS grew by 40.68%, representing $185M in newly minted USDS. Moreover, USD0 and DOLA showed notable increases of 8.12% and 4.22%, respectively. On the negative side, USDB and Binance’s BUSD shrank by 3.93% and 2.46%. Movements of the other stablecoins in this league were limited to 1.91%. 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 didn’t change much last week, increasing by only 0.01%. The pie chart below illustrates the market cap distribution of the stablecoins in the third league.
We witnessed a couple of position changes in this league. While USD+, LUSD, and USDz gained ranks, BUSD (Paxos), SUSD, and CUSD lost ranks. The table below shows the new ranks of the third league.
The biggest gainer in this league last week was USDz, with a 24.67% growth, followed by USD+ and LUSD, with 7.13% and 5.53% increases, respectively. The other positive performers saw market cap increases below 2.76%. On the negative side, SUSD shrank by 31.85%. The market cap decrease for the other negative performers was limited to 2.05%. 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 0.10% last week, reaching $144.75 billion. Ethereum gained 0.1% dominance compared to the previous week. The pie chart below shows their dominance.
Both of these chains saw slightly positive issuance last week. Total stablecoin issuance on Ethereum increased by 0.11%, reaching $84.81 billion, while Tron increased by 0.09%, reaching almost $60 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 $22.73 billion in stablecoins, with a 0.96% 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. Polygon and Optimism were the only losers in this tier in terms of stablecoin issuance, with less than a 0.60% decrease. Avalanche and Base showed significant growth, with a 4.13% and 2.94% increase, respectively. The growth of other chains was limited to 0.70%. 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 0.57% increase in total stablecoin issuance. As of September 29th, the total issuance in the C-tier is $4.15 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 only one flippening. Stellar’s 14.81% growth in stablecoin issuance allowed it to overtake Kava and secure the tenth rank.
Stellar was the biggest stablecoin gainer in this tier. Following it, Aptos and Scroll increased their stablecoin issuance by around 5%. Noble also showed significant growth. The other chains in this tier that increased their stablecoin issuance were limited to a 2.76% growth. On the negative side, the biggest losers in this tier were Fantom and Blast, with a 4.77% and 3.85% decrease, respectively. In addition to them, Kava lost 1.21% and Near saw a marginal 0.01% decrease in stablecoins on their chains. 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. Total stablecoin issuance on the chains in this tier decreased by 2.67% last week, dropping to $802.55M. This tier includes 13 chains, with their dominance ranging between 13.6% and 4.2%. The pie chart below shows the competition among chains in the D-tier.
According to the table below, Heco shrank by 40.61% last week. However, this was due to incorrect data from DefiLlama. Specifically, HUSD issuance was listed misleadingly last week, causing the rank changes in this tier.
Ignoring the change for Heco, the chains losing stablecoins in this tier are Linea, Osmosis, zkSync, and Metis, with their losses capped at 3.29%. On the green side, StarkNet increased its stablecoin issuance by 10.06%, followed by PulseChain with a 2.93% increase. Fraxtal, Tezos, and Klaytn also had positive performance last week. 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
Circle Launches Onchain Compliance Platform for Web3
Circle, the issuer of USDC, has introduced a blockchain-based compliance platform called Compliance Engine, offering tools for transaction screening and KYC compliance. This move aims to accelerate USDC’s adoption in the rapidly growing tokenized real-world asset (RWA) market, where Circle faces competition from PayPal’s PYUSD and Tether’s USDT.
TrustToken and TrueCoin Settle SEC Fraud Accusations
TrustToken and TrueCoin have settled fraud accusations with the SEC over misrepresenting the backing of the TrueUSD (TUSD) stablecoin and offering unregistered securities. The companies will pay fines and return nearly $400,000 in profits without admitting guilt. The settlement highlights the risks of misrepresentations in stablecoin backing, especially when profits were tied to risky offshore investments.
Curve Finance May Drop TUSD as crvUSD Collateral Amid SEC Scrutiny
Curve Finance is considering removing TrueUSD (TUSD) from its crvUSD stablecoin backing due to recent SEC charges against TUSD's issuer for misleading investors. A proposal has been put forward to reduce reliance on TUSD, raising concerns about the token’s solvency and regulatory risks. The SEC alleges that 99% of TUSD’s reserves were invested in a risky offshore fund, prompting Curve to explore more secure options for collateralizing crvUSD.
EtherFi Introduces eUSD and Launches Season 4 Campaign
EtherFi and Ethena have introduced a new USD-denominated liquid restaking token (LRT), eUSD, for USDe deposits on EigenLayer, marking the first dollar-backed asset in Ethereum’s restaking ecosystem. The token allows Actively Validated Services (AVS) to enhance their economic security and manage rewards more efficiently. Alongside this, EtherFi users can now claim points for Season 4, and EtherFi continues to recover from a recent domain attack without compromising user funds.
Ethena Adds UStb Stablecoin Backed by BlackRock’s BUIDL Fund
Ethena Labs has launched UStb, a new stablecoin fully backed by BlackRock’s BUIDL fund, which holds U.S. T-bills and repurchase agreements. UStb aims to provide more market stability for Ethena’s existing stablecoin USDe, which recently saw its market cap drop slightly. Ethena’s new offering comes as part of an increasingly competitive stablecoin market, with Ripple and PayPal launching their own stablecoins.
VUSD Depegs Following $3.8 Million OnyxDAO Exploit
OnyxDAO suffered a $3.8 million exploit due to a known vulnerability in the CompoundV2 codebase, causing its stablecoin VUSD to lose 90% of its value before partially recovering to $0.78. OnyxDAO has pledged to reimburse affected users and shut down its lending market. Traders continue to arbitrage VUSD in hopes that its peg will be restored through its reserves.
Societe Generale Forge Partners with Bitpanda for Euro Stablecoin
Societe Generale Forge has partnered with Bitpanda to advance the adoption of its euro-denominated stablecoin EURCV ahead of the EU’s MiCA regulatory framework. The partnership aims to integrate stablecoins into the global financial system, offering European investors secure access to digital currencies. The MiCA regulations are set to take full effect by the end of 2024, marking a pivotal shift in crypto regulation.
Vitalik Buterin Endorses Celo for Stablecoin Adoption Milestone
Ethereum co-founder Vitalik Buterin has endorsed Celo for surpassing Tron in daily stablecoin addresses, praising the platform’s growing role in global payments. Celo’s Alfajores testnet is set to transition to an Ethereum Layer 2, further aligning with Ethereum’s ecosystem. The move strengthens Celo’s integration with major stablecoins like USDC and USDT, boosting its stablecoin adoption.
Robinhood and Revolut Eye Stablecoin Market Amid European Regulations
Fintech giants Robinhood and Revolut are reportedly exploring the possibility of launching their own stablecoins. As regulatory clarity increases in Europe through the MiCA framework, these companies are considering entering the stablecoin space to compete with dominant players like Tether. The expansion comes as the stablecoin market continues to grow, with Tether currently holding 75% of the market.
Fed's Rate Cuts Could Slash Stablecoin Revenue by $1.5 Billion
The U.S. Federal Reserve’s recent rate cuts are expected to impact the revenue of the top stablecoin issuers significantly. A report from CCData estimates that each 50-basis-point cut could reduce interest income by $625 million, potentially totaling $1.5 billion in revenue loss by the end of 2024. Major stablecoin issuers like Tether and Circle hold substantial reserves in U.S. Treasury bills, making them highly sensitive to interest rate changes.
Canada Extends Stablecoin Compliance Deadline for Crypto Exchanges
The Canadian Securities Administrators (CSA) have extended the deadline for crypto trading platforms to comply with stablecoin regulations until December 31, 2024. Initially set for April 30, the deadline has been postponed twice due to technical challenges reported by exchanges. The CSA remains open to alternative approaches for ensuring investor protection, while some international platforms have exited the Canadian market due to the regulatory framework.
Useful Resources for More Stablecoin Information
Last Words
Did you enjoy this report? If so, you can also check out the monthly report I published last week, which covers the period from August 26 to September 22. And if you don’t want to miss new reports and more, I highly recommend subscribing to my Substack!